The Impact of AI and Robots on Employment and Wages (Japanese)

Kyoji Fukao, Kenta Ikeuchi, Yoshiaki Nagaya, Cristiano Perugini and Fabrizio Pompei

Policy Discussion Papers (Japanese) from Research Institute of Economy, Trade and Industry (RIETI)

Abstract: This study empirically examines the impact of advances in AI and robotics on employment, wages, and industrial structure in Japan. By constructing an original occupational-level Automation Risk Index (ARI) and combining it with industry-level panel data from 2009 to 2019, the analysis explores how investment in information and communications technology (ICT) capital affects labor market outcomes. A system of three simultaneous equations is used to account for the endogeneity of working hours, wages, and ICT capital intensity. The results indicate that increases in ICT capital tend to reduce working hours and exert a direct suppressive effect on wages. However, such negative effects are significantly mitigated in industries with lower ARI levels. Further analysis incorporating worker attributes reveals that highly educated, younger, and male workers are relatively less susceptible to the adverse effects of innovation. These findings underscore the importance of accounting for differences in automation risk when evaluating the impact of ICT investment on the labor market, and provide meaningful insights for the design of future employment and reskilling policies.

Pages: 107 pages
Date: 2025-04
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Persistent link: https://EconPapers.repec.org/RePEc:eti:rpdpjp:25008

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