In: Economics
The third arrow of Abenomics (structural reform) addresses three problems Japan faces – (a) a rapidly aging population and shrinking workforce, (b) falling or stagnant wages and increase in non-regular employment, (c) low economic status of women. Choose two or three policies Abe proposes to deal with each of these issues and briefly discuss them.
Abenomics means the policies such as fiscal policies, monetary policies and structural reforms, are taken into consideration by Shinzo Abe (Prime Minister of Japan). There policies are formally known as three arrows of Abenomics.
The third arrow of Abenomics ( i.e structural reform) deals with three problems of japan economy:
(a) A rapidly aging population and shrinking workforce,
(b) Falling or stagnant wages and increase in non-regular employment,
(c) Low economic status of women.
In the April 2014, Shinzo Abe administration reduced the corporate - tax. The basic purpose of reducing the corporate - tax is to stimulate more business activities in the economy. This policy by hinzo Abe administration is helpful to deal with falling or stagnant wages and increase in non-regular employment.
In the year 2015, Shinzo Abe administration introduces the new Abenomics which is formally known as Abenomics 2.0. The Abenomics 2.0 involves increased expenditure on education and child healthcare. The main problem Japan faces is that rapidly aging population and shrinking workforce. The basic idea of Abenomics 2.0 is to increase the involvement of woman worker in the total labor force of the economy. In the long run, Japan expected to have about 70 percent of woman worker in the total labor force of the economy. Which seems to be unpredictable few years ago. This would eliminate the japan problem of low economic status of women.
In 2018, the Abenomics is successful in lowering the unemployment rate from 3.32% in 2015 to 2.82% in 2017, and finally to 2.43% in 2018.