OECD Economics Department Working Papers

Working papers from the Economics Department of the OECD that cover the full range of the Department’s work including the economic situation, policy analysis and projections; fiscal policy, public expenditure and taxation; and structural issues including ageing, growth and productivity, migration, environment, human capital, housing, trade and investment, labour markets, regulatory reform, competition, health, and other issues.

The views expressed in these papers are those of the author(s) and do not necessarily reflect those of the OECD or of the governments of its member countries.

English, French

Boosting productivity for inclusive growth in Japan

Never in the past 30 years has productivity growth been lower than since the 2008 global financial crisis, and never has income inequality been higher than it is today in Japan, and in the OECD area. The two challenges have some common origins, including a widening productivity and wage gap between leading firms and those that are lagging. This creates scope for positive synergy between policies to promote productivity and inclusive growth. Exit policy should be improved to facilitate the closure of non-viable firms, whose survival hampers the growth of viable firms in Japan. This would also increase firm entry, along with policies to promote entrepreneurship. The growing gap between small and medium-sized enterprises and large firms also needs to be addressed. Breaking down labour market dualism, which limits human capital accumulation by non-regular workers and contributes to earnings and income inequality, is also a priority. Finally, ensuring appropriate skills, including those needed for digitalisation, would help support higher productivity and inclusive growth.

This Working Paper relates to the 2017 OECD Economic Survey of Japan (www.oecd.org/eco/surveys/economic-survey-japan.htm)


Keywords: entrepreneurship, productivity, product market regulation, human capital, labour market dualism, income inequality, innovation, corporate governance, SMEs, Abenomics, firm exit, bankruptcy law
JEL: J4: Labor and Demographic Economics / Particular Labor Markets; K3: Law and Economics / Other Substantive Areas of Law; O4: Economic Development, Innovation, Technological Change, and Growth / Economic Growth and Aggregate Productivity; O3: Economic Development, Innovation, Technological Change, and Growth / Innovation; Research and Development; Technological Change; Intellectual Property Rights
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