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Can Japan raise labour input with women and seniors? - RBS

FXStreet (Łódź) - Junko Nishioka and Long Hanhua Wang, economists at RBS look at the Japanese government's plans of increasing employment among women and seniors to boost growth.

Key quotes

"The government has sent a strong message for the aggressive use of female resources with the selection of five women to the Cabinet reshuffling (matching the past all-time high), and the labour market is moving in line with this political initiative."

"Meanwhile, companies are eliminating fixed-age retirement rules or raising age limits following the recent legal requirement to offer extended employment. We think these changes are boosting work opportunities for seniors."

"Is it possible to halt a decline of Japan's economic growth rate that has been deemed inevitable by steadily increasing the employment of women and seniors? Our analysis indicates that the best-case scenario of a steep rise in employment of women and seniors could raise the potential growth rate by as much as 0.3pp."

"This will improve the labour input contribution, which is currently in negative territory, to roughly zero by around 2022."

"However, we foresee this as being insufficient, and unless Japan promptly raises its birth rate to 2%, it will not see a notable shrinkage of the negative margin for labour input through 2060."

"Our view is that labour input will continue to affect the economy negatively over the long term, based on the current sluggish efforts to support employment of women in the child-rearing age group."

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