“Womenomics” Reveals The Power of the Purse in Japan

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The Japanese portfolio team within the Global Investment Research Division publishes “Womenomics: Buy the Female Economy” in 1999, launching a multiyear series of reports that cement “Womenomics” as part of the Japanese vernacular and a pillar of the country’s efforts to revive economic growth.

The decade of the 1990s was one of economic stagnation in Japan, with per-capita GDP growing at a scant 0.5 percent per year from 1991-2000. Often referred to as the “lost decade,” it came on the heels of a boom period in the 1980s in which low interest rates stoked speculation in real estate and the stock market. Between January 1985 and December 1989, the real value of the Nikkei 225 stock price index tripled. When the government ultimately raised interest rates to cool the economy, the bubble burst, and an equity market collapse and debt crisis ensued. By mid-1992, equity prices had fallen by about 60 percent, creating serious problems for Japanese banks over the next several years. In 1998, 181 small banks and credit cooperatives in Japan failed.

In August of 1999, Goldman Sachs’ Global Investment Research Division published a Japan Portfolio Strategy report titled “Womenomics: Buy the Female Economy.” In it, Tokyo-based strategists Kathy Matsui, Hiromi Suzuki and Yoko Ushio highlighted female consumption in the country as an important pocket of strength in the flagging Japanese economy. In addition to providing a list of 16 Japanese companies that either were poised to benefit from female consumption or were proactive in fostering female employment, the Goldman Sachs strategists argued that an increase in Japan’s female labor participation rate from the prevailing rate of 50 percent to 59 percent (the level in the U.S.) could boost the country’s real GDP growth in 2000-2010 to 2.5 percent per annum from 2.2 percent.

Matsui and her colleagues continued their research for the next two decades, advocating for workforce equality and making policy recommendations to close the gender employment gap in Japan. Further Goldman Sachs Research reports included “Womenomics: Japan’s Hidden Asset” (2005), "Womenomics 3.0: The Time Is Now" (2010), and “Womenomics 4.0: Time to Walk the Talk” (2014).

The term “Womenomics”—and the concept itself—gained the attention of the Japanese government, and would be adopted as a key pillar of reforms meant to revitalize the economy under Prime Minister Shinzo Abe in 2012. Since the publication of the 1999 report, Japan's female labor participation ratio surged to a record 71 percent—surpassing the United States and Europe. The Japanese government also introduced policies improving parental leave benefits and mandating equal pay for equal work.

In 2019, twenty years after the publication of the first report, Kathy Matsui, Hiromi Suzuki, and Kazunori Tatebe wrote "Womenomics 5.0." In the last report, the strategists estimated that closing Japan's gender employment gap could boost the country's GDP by 10 percent, and in a "blue-sky scenario" where the ratio of female vs. male working hours rises to the OECD average, the GDP boost could expand further to 15 percent.

Related: Womenomics 5.0, published April 2019


This article was originally published as part of a series commemorating the 150th anniversary of Goldman Sachs' founding in 1869.