At first glance, things seem to be getting better for Japanese women. In an economy that’s historically lagged other developed nations when it comes to female workforce participation, a record 71% are now employed, an 11 point leap over a decade ago.
The Japanese government boasts one of the most generous parental leave laws in the world and recently created a “limited full-time worker” category aimed primarily at mothers looking to balance job and family. And one of the most important needs for working families—child daycare—is slowly being expanded.
But even with these advantages, Japanese women—whether single or married, full-time or part-time—face a difficult financial future. A confluence of factors that include an ageing population, falling birth rates and anachronistic gender dynamics are conspiring to damage their prospects for a comfortable retirement. According to Seiichi Inagaki, a professor at the International University of Health and Welfare, the poverty rate for older Japanese women will more than double over the next 40 years, to 25%. For single, elderly women, he estimated, the poverty rate could reach 50%.
In Japan, people live longer than almost anywhere else and birth rates are at their lowest since records began. As a result, the nation’s working-age population is projected to have declined by 40% come 2055.
With entitlement costs skyrocketing, the government has responded by scaling back benefits while proposing to raise the retirement age. Some Japanese responded by moving money out of low-interest bank accounts and into 401(k)-style retirement plans, hoping investment gains might soften the blow. But such a strategy requires savings, and women in Japan are less likely to have any.
Japan’s gender pay gap is one of the widest among advanced economies. According to the Organisation for Economic Cooperation and Development, Japanese women make only 73% as much as men. Japan’s demographic crisis is making matters worse: Retired couples who are living longer need an additional $185,000 to survive projected shortfalls in the public pension system, according to a recent government report.