Good morning from London. A curious tale of unintended consequences emerges from the Far East, one that touches on market efficiency, behavioural economics, and the cost of social norms. Japanese football fans, mostly male, made headlines last week by staying behind at the World Cup stadium in Qatar to pick up litter.
A noble gesture, one might think. But as Milton Friedman would remind us, there is no such thing as a free lunch. Now Japanese women are pointing out that this admirable public spirit does not extend to the home front.
They are telling their menfolk, in no uncertain terms: clean at home too. This is not merely a social squabble. It is a microcosm of a larger economic inefficiency.
For decades, Japanese women have shouldered an outsized burden of unpaid domestic labour, effectively subsidising the productivity of male workers. According to data from the OECD, Japanese women spend nearly five hours a day on unpaid work, compared to just over one hour for men. That gap is among the widest in the developed world.
In economic terms, this is a misallocation of resources. It suppresses female labour force participation, reduces aggregate output, and fuels capital flight as frustrated workers seek opportunities abroad. The UK has been watching with interest.
Our own gender pay gap has narrowed, but we still have lessons to learn. The Treasury would do well to note that when women are freed from domestic drudgery, the economy gains. Higher female workforce participation adds to GDP growth, increases tax revenues, and reduces welfare dependency.
Some may call this a feminist issue. I call it a fiscal imperative. The Japanese stadium gesture was laudable, but it highlighted a hypocrisy that carries a cost.
If Japanese men want to be celebrated for cleaning up in public, let them start by scrubbing the bathroom at home. The market demands efficiency, and the domestic sphere is long overdue for a rationalisation. Now, over to the markets.
Gilt yields have been flat this morning, but the Bank of Japan will be watching these social dynamics with more than a passing interest. Central bank policy cannot operate in a vacuum. When a society underutilises the talents of half its population, the long-term economic trajectory is lower.
Investors would be wise to factor this into their models. Capital will flow to where it is best deployed. If Japan fails to capitalise on its female workforce, it will lose out to competitors who do.
The UK, meanwhile, should take note: our own domestic labour imbalance persists, though less starkly. The Office for National Statistics reports that British women still perform 60 per cent more unpaid work than men. That gap costs the economy billions in lost productivity.
The Chancellor might consider a fiscal incentive for equal sharing of domestic labour, say a tax break for couples who file joint returns with evidence of equal chores. It sounds absurd, but market failures require creative solutions. To conclude, the Japanese World Cup cleanup was a beautiful display of civic virtue.
But virtue alone does not fill the Treasury's coffers. Efficiency does. And efficiency demands that men pick up the broom at home as well as at the stadium.
That is the bottom line. The markets will judge accordingly.
