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May 29 (Bloomberg) -- Yukari Sato, one of Japan’s few female lawmakers, says changes in working conditions for women must accompany economic stimulus programs for the country to break out of a 15-year deflationary spiral.

Flexible working hours, revision of spouse tax deduction rules and better access to childcare are areas that need reform, said Sato, who served as chief economist at Credit Suisse Group AG before becoming a legislator in a nation that ranks behind Saudi Arabia in the proportion of women in parliament. The measures could help address a labor shortage that Morgan Stanley MUFG Securities Co. called an Achilles heel for Prime Minister Shinzo Abe’s revival program.

“What’s common sense in Japan is absurd by global standards, and what’s absurd here is common sense in the rest of the world,” Sato, 52, said in an interview in Tokyo on May 21. “As a pioneer, I hit many walls, but I would like to invite more Japanese women to join the club.”

Sato’s political career took off in 2005, when she became one of 43 women to secure Diet seats as former Prime Minister Junichiro Koizumi’s Liberal Democratic Party claimed a landslide election victory. The media-savvy campaign starred a number of fresh-faced, photogenic women dubbed Koizumi’s “assassins.” Her race against then-independent candidate Seiko Noda earned the two a “Madonna” moniker, a term used in Japan to refer to widely admired, high-profile women.

Women’s Odds

Sato, who graduated from Columbia University and has a Ph.D. in economics from New York University, remains a rarity in Japan. Only 16 percent of the 242-member upper house where she works are female, a government report shows. The proportion for the lower chamber is half that, placing Japan at 129 in a global ranking of women in national parliaments, below China at No. 61 and Saudi Arabia at 75th, according to the Inter-Parliamentary Union.

The disparity is mirrored in the workplace. Japan’s ratio of women to men in the labor force was 0.74 in 2010, ranking 90th globally and compared with the U.S.’s 0.86, the latest Global Competitiveness Report from the World Economic Forum shows. The number of women employed jumped 470,000 to 27 million last year, an increase unseen since 1991, according to the internal affairs ministry.

“We need to review social security and pension systems to keep up with the growing number of double-income families,” said Sato. “We must fix the distortion in the tax system and break barriers for women to work more freely and take active roles in the society.”

Abenomics Progress

Abe’s administration is reviewing rules that mean the second income earner in any household only pays tax if they earn more than 1.03 million yen ($10,110) a year, a measure that encourages about 14 million married workers to limit their workforce participation. Altering the arrangements could spur some women to work longer hours and help improve the gender balance in Japan’s shrinking labor force.

Abenomics, as the program of government spending, structural reforms and a central bank stimulus program of 7 trillion yen in monthly bond buying is known, spurred a stock market rally last year and pushed core inflation to the most since 2008. Consumer prices excluding fresh food have still declined at an average annual rate of 0.1 percent over the past decade.

The yen plunged 18 percent in 2013, bolstering earnings for exporters such as Toyota Motor Corp. and Panasonic Corp.

The increased cost of living hasn’t been matched by higher wages, prompting a warning from Goldman Sachs Group Inc. that the recovery may not be sustainable. The gender gap in the workforce could also be a “threat,” Robert Feldman, head of Japan economic research at Morgan Stanley MUFG, wrote in a report on May 27.

Social expectations about male and female roles in Japanese society have relegated women to positions as “back-up workers” and limited employer investment in training and promotion, according to the report.

“Abenomics has begun to address some labor market issues such as increased female participation,” Feldman wrote. “Gender dualism has contracted, but remains large.”

To contact the reporters on this story: Mariko Ishikawa in Tokyo at; Yumi Ikeda in Tokyo at

To contact the editors responsible for this story: Garfield Reynolds at Pavel Alpeyev

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