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Japan Per capita income remains nearly 20% below the upper half of OECD countries, reflecting low labour productivity and widening gaps between leading and lagging firms. Despite a falling working-age population, a rising participation rate among women and older persons is boosting labour inputs. Income inequality, as measured by the Gini coefficient, is above the OECD average, reflecting entrenched labour market dualism and the weak redistributive effect of the tax and social welfare system on the workingage population. Greenhouse gas emissions per capita are slightly below the OECD average while exposure to air pollution is above levels in other advanced economies. The government has addressed some of the priorities in Going for Growth 2017. The 2017 plan to expand childcare capacity is supporting female employment and free early childhood education and care (ECEC) for children aged 3-5 will be provided from 2019. Legislation to reduce overtime work and improve the treatment of non-regular workers will be fully enforced by 2023. Narrowing the productivity gap requires enhancing product market competition and the competitiveness of SMEs. Barriers to trade and investment inflows should be reduced to deepen Japan’s integration in the global economy. Further promotion of employment of women and older persons and the integration of foreign workers are essential to mitigate the impact of population ageing. Greater use of environmentally-related taxes would help achieve environmental goals. Growth performance, inequality and environment indicators: Japan A. Growth Average annual growth rates (%) GDP per capita Labour utilisation of which: Labour force participation rate 1
Employment rate Employment coefficient2 Labour productivity of which: Capital deepening Total factor productivity Dependency ratio
2002-08 1.1 0.4 0.2 0.2 0.0 1.0 0.2 0.8 -0.3
2012-18 1.3 1.5 1.2 0.3 0.0 0.2 -0.3 0.4 -0.4
GHG emissions per capita4 (tonnes of CO2 equivalent) GHG emissions per unit of GDP4 (kg of CO2 equivalent per USD) Share in global GHG emissions4 (%) * OECD simple average (weighted average for emissions data)
Gap to the upper half of OECD countries5 Per cent 5 GDP per capita
GDP per hour worked
0
-5
-10
B. Inequality and environment
Gini coefficient3 Share of national disposable income held by the poorest 20%
C. The gap in GDP per capita persists
Level
Annual variation (percentage points)
2015 33.9 (31.7)*
2012-15 0.3 (0)*
6.5 (7.6)*
0 (0)*
2016 9.8 (10.9)* 0.3 (0.3)* 2.7
Average of levels 2010-16 10.1 (11.3)* 0.3 (0.3)* 2.8
-15
-20
-25
-30
Source: Panel A: OECD, Economic Outlook Database; Panel B: OECD, Income Distribution and National Accounts Databases; United Nations Framework Convention on Climate Change (UNFCCC) Database and International Energy Agency (IEA), Energy Database; Panel C: OECD, National Accounts and Productivity Databases; Japan Ministry of Health, Labour and Welfare. StatLink 2 https://doi.org/10.1787/888933955085