Japanization: What the World Can Learn from Japan's Lost Decades

Chapter 2The Female ProblemHow Institutionalized Sexism Kills Growth

In October 2000, I found myself sitting next to Sheryl Sandberg in Tokyo, long before she joined Facebook Inc. and wrote her bestselling book on female empowerment. We were listening to her boss at the time, U.S. Treasury Secretary Summers, speak about the need for structural reforms to the Japanese economy, in a giant auditorium devoid of women. It was one of several male-dominated events that day where the only women around were serving us tea, not participating in discussions about Japan’s economy and politics. The author of Lean In leaned over and asked me half-seriously: “There are women in this country, right?”

Thirteen-plus years on, Japan’s leaders are only now realizing that the two problems are intertwined: The lack of women in the workforce poses one of the biggest structural impediments to faster growth. Japan’s institutionalized sexism deepens deflation, hurts competitiveness, and exacerbates the demographic trends that make Japan’s debt load so dangerous. It’s a reminder to policy makers everywhere, be they running huge economies or small ones, that sexism is dismal economics.

Yet, in July 2013, when Sandberg visited Tokyo to promote her book, I would have liked to relay good news about gender progress in Japan. I would have loved to bring her up to date about how Japan had made great strides since October 2000 in helping women reach high places in business and politics. It would have been great ...