Research Institute of Economy, Trade and Industry (RIETI)
RIETI BBL Seminar
Handout
November 26, 2014
Speaker: Dr. Randall S. JONES
Head of Japan/Korea Desk
Economics Department, OECD
http://www.rieti.go.jp/jp/index.html
OECD
Economic
Outlook
Randall S. Jones
Head, Japan/Korea Desk
25 November 2014
The global economy is stuck in low gear
World GDP growth
Per cent, seasonally‐adjusted annualised rate
Source: Preliminary November 2014 Economic Outlook database.
2
Trade growth has been weak
Trade intensity1
Index, 1990=100
United States
Trend (1990-2007)
Japan
350
350
300
300
250
250
200
200
150
150
100
100
50
50
350
European Union
BRIICS
350
300
300
250
250
200
200
150
150
100
100
50
50
1. Index of sum of exports and imports as a ratio of GDP.
Source: Preliminary November 2014 Economic Outlook database.
3
Labour market: divergent performance,
but overall slack remains
Unemployment rate
Number of unemployed persons
Per cent
Millions
14 60
14
12
10
United States
Euro area
Japan
11.5
12 50
10
8
8
6
6
5.8
4
2
0
4
3.6
60
Other OECD
USA
Euro area
50
40
17 million
30
20
40
30
14 million
10 million
20
7 million
2
10
0
0
18 million
10
12 million
0
Source: Preliminary November 2014 Economic Outlook database.
4
Demand patterns are diverging
in major advanced economies
120
110
Non‐residential investment per capita
Private consumption per capita
Index, 2005 = 100
Index, 2005 = 100
United States
Euro area
Japan
120
115
United States
Euro area
Japan
115
110
110
105
105
100
100
95
95
90
90
85
85
110
100
100
90
90
80
80
Source: OECD national accounts database; Preliminary November 2014 Economic Outlook database; and OECD calculations.
.
5
Trends are also diverging
among emerging economies
GDP per capita
Volume, 2005=100
240
220
240
China
220
200
200
180
180
160
140
India
Russia
120
100
80
160
140
120
Brazil
100
80
.Source: OECD National Accounts database; Preliminary November 2014 Economic Outlook database; IMF WEO
database; Central Statistical Organisation, India; and OECD calculations.
6
Growth projections for 2015-16
GDP
Volume, percentage change
Column1
World
2013
3.1
2014
3.3
2015
3.7
2016
3.9
United States
Euro area
Japan
China
India
Brazil
Russia
2.2
-0.4
1.5
7.7
4.7
2.5
1.3
2.2
0.8
0.4
7.3
5.4
0.3
0.3
3.1
1.1
0.8
7.1
6.4
1.5
0.0
3.0
1.7
1.0
6.9
6.6
2.0
1.6
Source: Preliminary Economic Outlook (EO) projections.
7
Growth projections for 2015-16
GDP growth
Per cent
8
7
6
5
4
3
2
7.1 6.9
8
6.6
6.4
7
5.9
6
5.2
3.94.2
4.1
3.9
3.8
3.7
4.0
3.2
5
2015
3.13.0 2.7
3.0
2.5 2.62.4 2.5
2.9
2.1
1
1.71.9
2.0
1.5
1.8
1.1
1.7
1.5
1.1
0.81.0 0.8
3
2
1.6
1.0
0.2
0
4
2016
1
0
0.0
-1
Source: Preliminary November 2014 OECD Economic Outlook database.
8
The threat of euro area stagnation has risen
Inflation
GDP
HIPC, 12‐month percentage change
Year‐on‐year percentage change
3.5
5
3.0
4
2.5
3
2.0
1.5
1.0
2
1
0.5
0
0.0
-1
-0.5
-2
Note: Shaded bands show +/- one standard deviation based on past variation.
Source: Preliminary November 2014 Economic Outlook database.
9
The strong net portfolio inflows to emerging
economies could reverse
Cumulative net portfolio inflows to BRIICS excluding China
Per cent of GDP, from Q1 2006
7
7
6
6
5
5
4
4
3
3
2
2
1
1
0
0
-1
-1
Source: IMF Balance of Payments database; OECD National Accounts database; and OECD calculations.
10
Advanced economy debt levels are high
and credit growth in China is rapid
China: credit to non‐financial private sector
Debt excluding the financial sector
Per cent of GDP
500
400
500
Government
Household
Non-financial corporations
180
400
300
300
200
200
100
100
0
200
2007 2013
2007 2013
2007 2013
United
States
Euro area
Japan
0
Per cent of GDP
Bank lending
Non-bank credit
200
180
160
160
140
140
120
120
100
100
80
80
60
60
40
40
20
20
0
0
Source: Preliminary November 2014 Economic Outlook database; ECB; OECD Financial accounts; and BIS.
11
Potential growth rates could fall further
Potential GDP growth Annual average, per cent
12
12
1998-2002
2003-2007
2008-2014
10
10
8
8
6
6
4
4
2
2
0
United States
Euro area
Japan
China
India
Brazil
0
Source: Preliminary November 2014 OECD Economic Outlook database.
12
Key messages
Global growth is modest, with widening differences across
countries
Financial risks are rising and volatility is set to increase
Potential growth has slowed, interacting with weak demand
Weakness in the euro area is a major concern
Monetary, fiscal and structural policies must all be employed to
address risks and support growth
13
Monetary, fiscal and structural policies
need to support growth
Monetary policy needs to remain accommodative in most
countries, and more aggressive QE is needed in the euro area
Fiscal consolidation has progressed significantly, leaving room
in many economies to slow the pace of adjustment
Ambitious structural reforms are needed to boost investment,
trade and job creation
Significant efforts by G-20 countries to develop comprehensive
growth strategies for the Brisbane summit are welcome
14
JAPAN
15
Short-term economic projections1
Percentage changes
2012
2013
2014
2015
2016
1.5
1.5
0.4
0.8
1.0
Private
2.0
2.0
-0.9
1.0
1.2
Government
1.7
2.0
0.3
0.3
0.5
3.5
2.6
3.7
-1.0
-0.5
Public2
3.1
11.3
4.8
-6.8
-17.7
Residential
3.0
8.8
-4.0
-1.5
3.6
Business
3.7
-1.5
5.1
1.0
4.0
Final domestic demand
2.3
2.1
0.3
0.4
0.7
Stockbuilding3
0.1
-0.3
0.1
0.0
0.0
Total domestic demand
2.3
1.9
0.4
0.4
0.7
Exports of goods and services
-0.2
1.6
7.8
6.2
6.7
Imports of goods and services
5.3
3.4
6.9
3.2
4.6
Net exports3
-0.9
-0.3
-0.1
0.4
0.3
Demand and output (volumes)
GDP
Consumption
Gross fixed investment
1. Excluding the second tax hike, which was delayed to 2017.
2. Including public corporations.
3. Contribution to GDP growth.
Source: OECD Analytical Database and OECD estimates and projections.
16
Business confidence remains high in the Tankan
Survey¹
Diffusion index (% pts)
Diffusion index (% pts)
30
30
20
20
10
10
0
0
-10
-10
-20
-20
-30
-40
-50
-30
Large enterprises
Small enterprises
2004
2005
2006
2007
-40
2008
2009
2010
2011
2012
2013
2014
-50
1. Diffusion index of ''favourable'' minus ''unfavourable'' conditions. Large enterprises are capitalised at a billion yen or more and small
enterprises at between 20 million yen and a 100 million yen. Numbers for the fourth quarter are companies' projections made in September
2014.
Source: Bank of Japan.
17
Nominal wage increases have not kept pace
with inflation
Year-on-year per cent changes¹
Per cent
Per cent
2
2
1
1
0
0
-1
-1
-2
-2
Nominal wages
Real wages
-3
-4
Q1
Q2
Q3
2012
Q4
-3
Q1
Q2
Q3
Q4
2013
Q1
Q2
Q3
-4
2014
1. Total cash earnings (including bonuses). Data are three-month moving averages.
Source: Ministry of Health, Labour and Welfare, OECD calculations and Bank of Japan.
18
Short-term economic projections
In per cent
2012
2013
2014
2015
2016
GDP deflator
-0.9
0.6
1.6
1.7
1.4
CPI1
0.0
0.4
2.9
1.8
1.6
Core CPI1,2
-0.5
-0.1
1.9
1.6
1.6
Unemployment rate
4.3
4.0
3.6
3.5
3.5
Output gap
-0.7
0.2
-0.2
-0.2
0.0
World trade growth
3.0
3.3
3.0
4.5
5.5
Net government lending (% of GDP)
-8.7
-9.0
-8.3
-7.3
-6.3
Net primary balance (% of GDP)
-7.8
-8.1
-7.2
-6.2
-5.4
Gross debt (% of GDP)
216.5
224.2
230.0
232.8
236.7
Net debt (% of GDP)
129.4
137.2
142.9
146.8
149.6
Household saving ratio (%)
1.3
0.4
1.8
1.9
1.8
Current account (% of GDP)
1.1
0.7
0.1
0.9
1.4
Inflation and capacity utilisation
Memorandum items:
1. Including the impact of the consumption tax hike from 5% to 8% in April 2014.
2. The core CPI is the OECD definition, which excludes both food and energy.
Source: OECD Analytical Database and OECD estimates and projections.
19
The first arrow of Abenomics: bold monetary
policy with Quantiative and Qualitative Easing
Central bank assets
Per cent of GDP
60
50
40
United States
Euro area
Japan
60
50
40
30
30
20
20
10
10
0
0
Source: Datastream; National Central Banks.
QQE has boosted inflation expectations and pushed underlying inflation into
positive territory in late 2013.
However, inflation, which had risen to 1½ per cent (year-on-year) prior to
the tax hike, slowed to around 1% in late 2014 (excluding the tax hike).
The BoJ’s “quantitative and qualitative monetary easing” is now increasing
the monetary base at an annual pace of about 80 trillion yen per year.
20
Inflation has fallen since early 2014
Year-on-year percentage change
Per cent
Per cent
4
3
4
CPI (without tax hike)
CPI (with tax hike)
Inflation target
3
2
2
1
1
0
0
-1
-1
-2
-2
-3
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
-3
Source: OECD Economic Outlook 96 and Bank of Japan.
21
The second arrow of Abenomics:
flexible fiscal policy
Improvement in underlying primary balance
Per cent of potential output
7
7
6
from 2009 to 2014
6
5
from 2014-to 2016
5
4
4
3
3
2
2
1
1
0
United States
Euro area
Japan
0
Source: Preliminary November 2014 Economic Outlook database.
Despite the 2014 tax hike, there was no fiscal consolidation
over 2010-14, in part due to the 2011 Great East Japan
earthquake.
A small amount of consolidation is expected in 2015-16, due to
spending cuts.
Japan must continue to address its fiscal challenges.
22
Total spending and social welfare spending in Japan
Per cent of GDP
Per cent of GDP
45
45
Social spending in kind
Social security benefits paid
Government revenue
Government expenditure
40
40
35
35
30
30
25
25
20
20
15
15
10
10
5
0
5
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
0
Source: OECD Analytical Database.
23
Japan's public debt has soared during the past 20 years¹
Primary budget balance on a general government basis
Per cent of GDP
6
Per cent of GDP
6
5
5
Japan
United States
Greece
OECD
4
3
2
4
3
2
1
1
0
0
-1
-1
-2
-2
-3
-3
-4
-4
-5
-5
-6
-6
-7
-7
-8
-8
-9
-9
-10
-10
-11
-11
-12
2008
2009
2010
2011
2012
2013
2014
2015
2016
-12
1. OECD estimates for 2014 and projections for 2015-16.
Source: OECD Economic Outlook 96.
24
Japan's public debt has soared during the past 20 years¹
Gross public debt on a general government basis
Per cent of GDP
240
Per cent of GDP
240
210
210
Japan
United States
Greece
OECD
180
180
150
150
120
120
90
90
60
60
30
30
0
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
2014
2016
0
1. OECD estimates for 2014 and projections for 2015-16.
Source: OECD Economic Outlook 96.
25
The third arrow of
Abenomics: a growth
strategy that encourages
private-sector investment
Living standards in Japan have fallen relative to the top
half of the OECD
Top half of OECD = 100
Top half of OECD = 100
130
130
125
125
120
120
Labour inputs³
115
115
110
110
105
105
100
100
95
95
90
90
Per capita income¹
85
85
80
80
Labour productivity²
75
70
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
75
70
1. Per capita GDP using 2013 PPP exchange rates.
2. GDP per hour of labour input.
3. Total number of hours worked per capita.
Source: OECD Going for Growth Database.
27
Japan’s share of world exports has been falling during the
past 20 years
Per cent
Per cent
14
14
12
12
10
10
8
8
6
6
4
2
0
4
Japan
China
Germany
United States
1994
1996
1998
2000
2002
2004
2006
2008
2
2010
2012
0
Source: WTO Database.
28
Japan’s potential GDP growth rate has fallen sharply since
2012
Per cent
Per cent
3.5
3.5
Potential employment
3.0
Trend labour productivity
Potential real GDP
3.0
2.5
2.5
Japan’s growth target¹
2.0
2.0
1.5
1.5
Average real GDP growth (1990-2012)²
1.0
1.0
0.5
0.5
0.0
0.0
-0.5
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
-0.5
1. The 2% target was set in 2009 and maintained by subsequent governments.
2. Average annual GDP growth in real terms in Japan between 1990 and 2012.
Source: OECD Potential Output Database.
29
Average labour productivity growth1 in Japan is already
near the OECD average
Average annual growth rate over 2000-13
Per cent
Per cent
3.5
3.5
3.0
3.0
2.5
2.5
2.0
2.0
1.5
1.5
OECD average
ITA
DEU
NOR
MEX
ISR
CAN
BEL
LUX
AUT
FRA
DNK
NLD
NZL
ESP
CHE
FIN
JPN
GBR
GRC
AUS
PRT
SWE
IRL
USA
HUN
CHL
ISL
-0.5
SVN
-0.5
CZE
0.0
TUR
0.0
KOR
0.5
POL
0.5
EST
1.0
SVK
1.0
1. Real GDP divided by total employment (including self-employed).
Source: OECD Economic Outlook Database.
30
The level of total factor productivity in non-manufacturing
has declined since 1991
Index 1970 = 100
Index 1970 = 100
300
300
275
275
Manufacturing
Non-manufacturing
250
250
225
225
200
200
175
175
150
150
125
125
100
1970
1975
1980
1985
1990
1995
2000
2005
2010
100
Source: Japan Industrial Productivity Database 2013.
31
Investment in knowledge-based capital
Per cent of GDP in OECD countries, 2010 or latest year available
Per cent of GDP
A. Per cent of GDP in OECD countries, 2010 or latest year available
Per cent of GDP
12
12
Innovative property
Software
Economic competencies
10
10
8
8
6
6
4
4
2
2
0
USA CAN SWE GBR BEL JPN DNK FRA FIN SVN HUN NLD DEU CZE AUT SVK LUX AUS IRL PRT EST ESP POL NOR ITA GRC
0
Source: Corrado et al. (2012).
32
Investment in knowledge-based capital
Contribution to the growth in labour productivity, 1995 to 20071
B. Contribution to the growth in labour productivity, 1995 to 2007
Annual average growth
Annual average growth
6
6
TFP
Labour composition
Tangibles
Knowledge-based capital
Labour productivity growth
5
4
5
4
3
3
2
2
1
1
0
0
-1
SVN
CZE
FIN
IRL
SWE
GBR
USA
AUT
NLD
JPN
FRA
BEL
DEU
DNK
ESP
ITA
-1
1. Annual average growth rate from 1995 to 2007 of output per hour worked.
Source: Corrado et al. (2012).
33
Policies to boost output growth
toward the government’s 2% target
1. Improve framework conditions
• Corporate governance
• Product market regulations
• International competition (FDI, EPAs, TPP)
• Labour mobility
Japan lags behind frontrunners in overall product
market regulation in 20131
A. Overall product market regulation
Index
Index
NLD
GBR
AUT
DNK
ITA
NZL
PRT
DEU
FIN
EST
AUS
SVK
HUN
BEL
CZE
JPN
CAN
IRL
ESP
NOR
LUX
OECD
FRA
0.0
CHE
0.0
ISL
0.5
CHL
0.5
SWE
1.0
POL
1.0
SVN
1.5
KOR
1.5
GRC
2.0
ISR
2.0
MEX
2.5
TUR
2.5
1. The OECD Indicators of Product Market RegulationB.are
a comprehensive
internationally-comparable set of indicators that measure the degree
Barriers
to trade andand
investment
to which policies promote or inhibit competition. Research shows that the indicators have a robust link to performance. The indicator, based on
more than 700 questions, ranges from zero (most relaxed) to three (most stringent).
Source: OECD Product Market Regulation Database and Koske et al. (2014).
35
The number of bankruptcies in Japan is
falling
A. The number of bankrupties is falling to Japan
Thousand Yen
16
Per cent
Number of bankrupties (axis left)
Real GDP growth (axis right)
14
4
2
12
0
10
8
-2
6
4
-4
2
0
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
-6
Source: SMEA (2014), ADB National Accounts Database, and OECD (2014),Science, Technology and Industry Scoreboard.
36
The number of bankruptcies in Japan has fallen since
2008 despite two crises
B. International comparison of number of bankrupties
Index 2007 = 100
Index 2007 = 100
In 2012
250
250
225
225
200
200
175
175
150
150
125
125
100
100
DNK
NLD
ISL
USA
NOR
AUS
GBR
FIN
0
SWE
25
FRA
25
BEL
50
DEU
50
JPN
75
CHL
75
CAN
t
0
Source: SMEA (2014), ADB National Accounts Database, and OECD (2014),Science, Technology and Industry Scoreboard.
37
Credit guarantees for SMEs in Japan are
exceptionally high
Stock of guarantees as a per cent of GDP in 2010
Per cent
Per cent
8
8
6
6
4
4
2
2
0
JPN KOR ITA PRT HUN CHL FRA EST CZE SVN ESP NLD USA SVK BEL DEU TUR AUT GRC POL
0
Source: OECD (2013), Financing SMEs and Entrepreneurs 2013: An OECD Scoreboard, OECD Publishing.
38
International comparison of barriers to trade and
investment in 20131
B. Barriers to trade and investment
Index
Index
NLD
BEL
AUS
GBR
FIN
LUX
POL
HUN
CHE
IRL
PRT
FRA
DEU
ESP
ITA
CZE
CHL
ISL
DNK
GRC
OECD
NZL
SVK
0.0
NOR
0.0
AUT
0.5
SWE
0.5
JPN
1.0
EST
1.0
SVN
1.5
CAN
1.5
ISR
2.0
TUR
2.0
KOR
2.5
MEX
2.5
1. The OECD Indicators of Product Market Regulation are a comprehensive and internationally-comparable set of indicators that measure the degree
to which policies promote or inhibit competition. Research shows that the indicators have a robust link to performance. The indicator, based on more
than 700 questions, ranges from zero (most relaxed) to three (most stringent).
Source: OECD Product Market Regulation Database and Koske et al. (2014).
39
Japan’s stock of inward and outward investment
is low in 2013
Inward in per cent of GDP
Inward in per cent of GDP
200
200
BEL
Δ LUX
(301,234)
175
150
IRL
175
150
125
125
CHE
100
100
75
CZE
SVK
50
POL
NZL
25
MEX
TUR
0
SVN
0
HUN
EST
CHL
NLD
SWE
PRT
NOR
CAN
OECD
ITA
DEU
75
GBR
ESP
AUS
ISR
ISL
50
AUT
FIN
DNK
FRA
25
GRC
USA
KOR JPN
25
50
75
100
125
150
175
0
200
Outward in per cent of GDP
Source: OECD Foreign Investment Database.
40
It is important to address the factors limiting
inflows of foreign direct investment
1.
2.
3.
4.
5.
6.
Low level of corporate mergers and acquisitions (M&As): the 2007 law to
facilitate “triangular mergers” has not been effective.
The tax system: a high corporate income tax rate and the short “net
operating loss period” discourages FDI inflows.
Corporate governance: Japan’s corporate governance framework lags
behind global standards and the lack of clarity and accountability
discourages potential investors.
The regulatory environment: Unclear administrative practices and
unique and rigid standards for certifying consumer goods in Japan are a
deterrent to FDI inflows.
Employment: Japan needs to enhance the flexibility of employment as the
lack of mid-career mobility makes it difficult for foreign firms in Japan to
secure experienced workers.
Entry of foreign workers: Given that FDI is also facilitated by the
movement of people, rules that restrict the entry of workers can
discourage foreign investors.
The Producer Support Estimate1 for Japan is the
second highest in the OECD
Per cent
Per cent
80
80
1986-88
2011-13
70
70
60
60
50
50
40
40
30
30
20
20
10
10
0
0
NOR
JPN
CHE
KOR
ISL
EU
TUR
OECD
CAN
MEX
ISR
USA
CHL
AUS
NZL
1. Producer support is the annual monetary value of gross transfers from consumers and taxpayers arising from policies that support agriculture,
regardless of their nature, as a per cent of the value of gross farm receipts. Countries are ranked according to their 2011-13 levels. Chile, Israel
and Slovenia excluded from the OECD total in 1986-88. The EU figure is the EU12 for 1986-88 and the EU27 for 2011-13.
Source: OECD PSE/CSE Database 2014.
42
Japan’s farm workforce is elderly
The age distribution of rice farmers in 2010
Under 29
30-39
40-49
2%
3%
Over 70
50-59
3% 9.0%
56.0%
27.0%
60-69
Source: Ministry of Agriculture, Forestry and Fisheries (2010).
43
Total factor productivity growth and business
R&D intensity
1995-2010
TFP growth, % change
2.5
2.5
SWE
IRL
2.0
1.5
AUS
1.0
0.5
AUT
FIN
USA
DEU
0.0
1.5
KOR
1.0
NLD
DNK
GBR BEL
NOR
FRA
CAN
NZL
2.0
0.5
JPN
0.0
-0.5
-1.0
-1.5
-2.0
0.0
-0.5
PRT
-1.0
ITA
-1.5
ESP
0.5
1.0
1.5
2.0
2.5
-2.0
3.0
Business R&D as a share of GDP, %
Source: OECD Analytical Database; OECD Long-term Scenario Database; OECD Main Science and Technology Indicators.
44
Policies to boost output growth
toward the government’s 2% target
2. Improve the innovation framework
• Upgrade the quality of universities
• Expand international linkages
• Enhance the role of universities
Comparative performance of national science and
innovation systems in 2014
Index
200
A. Science base (relative to GDP)
B. Internationalisation (per cent)
150
200
150
OECD median
100
100
50
0
Index
50
Top 500 universities
Publications in the top-quartile journals
International co-authorship
International co-patenting
0
Index index of performance relative to the median values in the OECD, which are set at 100. The top performer is set at 200 and the Index
Note: Normalised
lowest at zero.
The fifth-highest performer in the case of the “Top 500 universities” had a score of 137 relative to the OECD median, while the fifth lowest had a score of 5.
Japan, with a score of 43, was in the middle range.
Source: OECD (2014), OECD Science, Technology and Industry Outlook 2014, OECD Publishing, Paris.
46
Flows of R&D funds in 2011
A. R&D funding
Allocation of R&D spending by sector performing it
Share of total R&D
spending
1
Government
Universities
Business enterprises
Foreign sources
Government
17.2
5.8
76.5
0.5
Universities
53.5
0.4
0.7
7.1
41.4
99.4
0.5
1.3
Business
enterprises
Total
5.1
0.2
98.8
91.7
100.0
100.0
100.0
100.0
B. Sector performing R&D
Funding source for R&D performed
Share of total
R&D
performed
Government
Universities
Business
enterprises
Foreign
sources
Total
9.8
13.2
77.0
93.9
54.0
1.1
0.3
43.3
0.0
5.5
2.7
98.3
0.3
0.0
0.6
100.0
100.0
100.0
1
Government
Universities
Business enterprises
1. Includes private non-profit institutes.
Source: OECD R&D Statistics Database.
47
Increase in R&D performed in universities in
Japan has lagged behind other OECD countries
The increase between 2000 and 2012 (or latest year) in real terms
Per cent
Per cent
280
280
240
240
200
200
160
160
120
120
80
80
40
40
0
JPN
ITA
FRA
GBR
DEU
CAN
USA
OECD
0
Source: OECD R&D Statistics Database.
48
The share of non-regular workers is rising¹
Regular workers excluding executives (left scale)
Non-regular workers (left scale)
Share of non-regular workers (right scale)
Annual level
change (thousand persons)
Per cent
40
150
120
35
90
60
30
30
0
-30
25
-60
-90
20
-120
-150
-180
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
15
1. Data are for February for each year through 2001 and for the first quarter since 2002.
Source: Ministry of Internal Affairs and Communications, Labour Force Survey.
49
There are large income gaps between
regular and non-regular workers
A. Household headed by a regular worker
10 thousand Yen
60
B. Household headed by a non-regular worker
Per cent 10 thousand Yen
Per cent
90
60
90
75
50
75
40
60
40
60
30
45
30
50
Income by partner (left scale)
Income by head of household (left scale)
No partner (right scale)
20
30
20
10
15
10
0
0
0
20-24 25-29 30-34 35-39 40-44 45-49 50-54 55-59 60-64 65-69
45
Income by partner (left scale)
Income by head of household (left scale)
No partner (right scale)
30
15
20-24 25-29 30-34 35-39 40-44 45-49 50-54 55-59 60-64 65-69
Age group
0
Age group
Source: Ministry of Health, Labour and Welfare, 2014 White Paper on Labour Economics.
50
The fertility rate has fallen while female
labour force participation has risen
Fertility rate
Fertility rate
1.9
1.9
1984
1.8
1.8
1985
1986
1987
1.7
1.7
1988
1.6
1.6
1989
1990
1.5
1991
1994
1992
1993
19951996
1.4
2012
2013
1.4
2010
1998
2008
1997
2000
2011
2009
2001
2006 2007
1999
2002 2004
2003 2005
1.3
1.3
ln(Y) = 6.3 -1.4*ln(X)
R²
= 0.6
1.2
1.1
1.5
58
60
62
64
66
1.2
68
70
72
74
1.1
76
Female labour force participation rate, 25-54
Source: 2013 OECD Economic Survey of Japan.
51
The employment ratio for women with
university degrees1 in 2012
Per cent
Per cent
KOR
TUR
GRC
JPN
ESP
MEX
ITA
SVK
HUN
USA
IRL
CZE
CHL
LUX
OECD
CAN
0
AUS
0
GBR
10
NZL
10
EST
20
PRT
20
ISR
30
POL
30
FRA
40
FIN
40
BEL
50
CHE
50
AUT
60
SVN
60
DEU
70
NLD
70
DNK
80
SWE
80
ISL
90
NOR
90
1. Including other types of tertiary education.
Source: OECD Employment Outlook, 2014.
52
Increasing female employment can help
avoid looming labour supply shortages
Projected size of the labour force in thousands of people1
65 000
53
Female participation rate increases
to converge with male rate by 2030
60 000
.
55 000
50 000
Male and female labour force participation
rates remain at levels observed in 2011
45 000
1. Based on population projections for persons aged 15-64 years and assuming that the labor force participation rate for men remains constant from 2011 to 2030.
Source: OECD (2014), “Japan – Advancing the third arrow for a resilient economy and inclusive growth”, Better Policies Series, OECD Publishing, Paris, April,
http://www.oecd.org/japan/2014.04_JAPAN_EN.pdf
54