I'm making my way through Introduction to Japanese Society by Yushio Sugimoto, which is kind of a broad overview of the sociological literature on Japan. I'll have more on the book later once I've finished, but one point driven home by the book is that a great many of the stereotypes and assumptions about Japan don't survive even a cursory look at the underlying statistics.
I had this in mind when I read two recent articles on Japan in the Economist. The first concerned discrimination and underutilization of women in the work force. The second concerned the persistant narrative that Japan has been mired in a lost decade for the past two decades. The general gist of this article is that demographic changes are prime reason for the perception of weakness, and that once you control for differentials in population growth Japan's recent economic performance is quite good. This is a theme I explored a bit before here.
But first let's look at why smart reasonable people think Japan has been stuck in a lost decade. Here's real GDP for Japan, US, Germany, and China since 1980. (click to enlarge)
You see how the yellow line has pretty much been flat since the early 90s? That's the stagnation people are talking about. But as the Economist points out the US added a whole lot more people over that time period then Japan, once you account for GDP on a per capita basis a Japan's economic performance looks a lot better.
I actually think the Economist didn't go far enough here. Not only has Japan experienced lower population growth, but an increasing share of it's population is passed working age. Curtesy of the great statistics database at the World Bank website, I further adjusted the GDP data to look at it per working age person, those aged 15-65. On this basis the difference in performance between the US and Japan pretty much disappears.
Over the past decade Japanese worker's productivity has actually increased faster than both their US and German counterparts. Now that isn't to say that total GDP, or per capita numbers don't matter. They do depending on the question you're concerned with, for example can Japan support it's level of outstanding debt? Can it maintain it's standard of living for it's retired population? Or that raw economic numbers capture everything society should be concerned with. For the moment let's table issues about inequality, environment, culture, leisure time etc.
What this does show is that contrary to the popular narrative of stagnation Japan continues to be as economically vibrant and innovative place as pretty much any other developed country. Once you take into account the fact that a lot of American economic activity involved building useless houses in the desert and financial wizardry to hide the fact that they were useless, Japan's performance looks even better.
While the US and Japan end up with similar GDP PWP numbers if you drill down there are quite a few differences in how they get there. As the first Economist article points out Japan doesn't utilize the female half of it's potential labor force nearly as efficiently as other developed countries.
Also from the world bank here is the female labor force participation rate for the US, Japan, and Germany.
Note that this data just looks at raw employment, and makes no adjustment for the type of employment. A waitress is just as employed as an engineer.
I'm not attempting a comprehensive treatment of these issues by any means. Japanese also work longer hours then Americans, who in turn work more then the Germans. Things can get complicated real fast when you consider that those longer hours are likely a contributing factor to both higher per worker output as well as lower birthrates and female participation in the work force.
The broader point here is that once a given narrative catches on in society it can be very persistant. People become pre-disposed to see evidence of that narrative in their daily lives, while viewing any contrary events as an anomaly (confirmation bias). That's not to say statistics are everything, often anecdotes captures some essential point missed in the statistics, or help illustrate some trend in an understandable way. However, looking at data is one way of testing our assumptions about how the world works.
Anyway that's enough for now.
Class dismissed.
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