Japan, the world’s second-largest economy, has a shrinking population of working adults and is expected to lose 70% of its workforce by 2050. This forecast is based on Japan having the world’s highest proportion of people over 65 and lowest proportion of children under 15. A recent article in the Washington Post explains that Japan’s social and corporate cultures are the catalysts of this trend.

Socially, women in Japan are delaying marriage and consequently narrowing the window for bearing children. This is mainly because the burden of raising children falls almost exclusively on women as their husbands refuse to help raise them. In fact, Japanese men in their 30s continue to be consumed by their jobs, with only 0.5% of men taking the government-guaranteed parental leave. In addition, Japanese women find the universal expectation of Japanese men to be fed, clothed, and picked up after very annoying, further decreasing the willingness of these women to get married. And finally, the cultural taboo against single parenthood or cohabitation is also very strong in Japan.

The corporate culture in Japan is the other strong force leading to the plunging birthrates in the country. Starved for young workers, corporate Japan is seeking out single women. In spite of laws to prevent corporate discrimination against women, such discrimination is still prevalent (Japan ranked 91st among 128 countries on the gender equality survey recently conducted by the World Economic Forum). Hence the increase in demand for single women workers is keeping them away from childbirth as only a third of the women remain in the workforce after having a child (vs. two-thirds of mothers in the U.S.). The Doing Business in Japan module on globalEDGE is an excellent resource for in-depth understanding of the work/cultural issues in Japan.

Japan is not the only country when it comes to shrinking birth rates – many developed countries in the Asia-Pacific region are experiencing this phenomenon. In addition to Japan, the 2008 CIA ranking of global fertility rates also has Taiwan, Singapore, and Hong Kong at the bottom of the list. The changing economy in the Asia-Pacific region as a result of a shrinking working population can have catastrophic implications – not just for the region, but for the entire world. How can governments re-organize society to cultivate a better work-life-balance in the region’s corporate culture? How can Japan encourage women to continue working while they get married and raise children? The stakes are high and a wake-up call for the region’s leaders may be in order.

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