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Wealthy housewives won’t play Abe’s game

Yuriko Nakao | Bloomberg | Getty Images

Japan is making progress on getting women into the workforce but at a much slower pace than is needed to spur the economy as the country's hidebound culture keeps some of them at home, analysts say.

"The female labor force participation rate has risen," but compared with other G-7 countries Japan still ranks "exceptionally poorly ", said Capital Economics' Japan economist Marcel Thieliant in a note. Lifting the proportion of college educated women in paid positions to levels similar to other G-7 countries could "boost output by as much as 6 percent."

Broadly, Prime Minister Shinzo Abe's effort to tackle gender inequality and increase female labor force participation, has met success. The unemployment rate for women has fallen from 4.3 percent in 2012, the year Abe was returned to power, to 3.4 percent in 2014, according to Organization of Economic Cooperation and Development (OECD) figures.

The unemployment rate for women in the U.S. during the same period was 8 percent in 2012 and 6.1 percent in 2014, according to the OECD.

But progress may not be fast enough to boost the economy, which is struggling to recover from a technical recession sparked by a consumption tax hike last April.

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"The share of women in paid employment has already been rising rapidly since Mr. Abe returned to power. [But] unless it increases at an even faster pace in coming years, a rising female participation rate won't lift GDP (gross domestic product) growth any further," he said.

For the whole of 2014, Thieliant forecasts GDP growth of just 0.3 percent and of 0.1 percent for 2015.

No need, no desire

The problem is that many college educated Japanese women remain resistant to working.

"Highly educated women don't have much of an incentive to go out to work. They tend to marry similarly well-educated high earners and don't need to work for a living," said NLI Research Institute economist Naoko Kuga.

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"[Furthermore], the social infrastructure – in terms of childcare or work environment – just isn't there," she said.

The proportion of college educated Japanese women who work was just under 70 percent in 2011, compared with over 80 percent in the other G-7 countries, said Thieliant citing figures from the Organization of Economic Cooperation and Development.

Although highly educated women are more likely than their less schooled peers to keep their careers after marriage or childbirth, if they do quit, they are less likely to go back to work: just 45.1 percent of college educated women go back to work, compared to 57.6 percent of high-school grads, according to a 2009 government survey.

"The government needs to recognize these highly educated women don't see any incentive to go back to work," NLI's Kuga said. Japanese corporate culture remains "a man's world."