Both Japan and Korea are trying to boost female labor force participation (FLFP) as they face the challenges of a rapidly aging population. Though FLFP has generally been on a rising trend, the female labor force in both countries is skewed towards non-regular employment despite women’s high education levels. This paper empirically examines what helps Japan and Korea to increase FLFP by type (i.e., regular vs. non-regular employment), using the SVAR model. In so doing, we compare these two Asian countries with two Nordic countries Norway and Finland. The main findings are: (i) child cash allowances tend to reduce the proportion of regular female employment in Japan and Korea, (ii) the persistent gender wage gap encourages more non-regular employment, (iii) a greater proportion of regular female employment is associated with higher fertility, and (iv) there is a need for more public spending on childcare for age 6-11 in Japan and Korea to help women continue to work.
Korea that strengthened the senioritywagefeature and stable employment. Given that the system is not based on economic efficiency but on the social democratization, Korean employers are more likely to weaken the existing employment relation during an economic recession.
C. Alternative Measures of Child Benefits and Childcare
In the previous section, we show that cash allowances can affect the incidence of FLFP. However, we were constrained by data availability. That is, we used a very narrow definition of child allowances for the empirical analysis. Here we