Biased Technological Change and Japanese Manufacturing Employment

Abstract

This paper examines the effect of technological change on the demand for production and nonproduction workers of the Japanese manufacturing industries since the 1980s. First, a decomposition of the change in the share of nonproduction workers in total employment into between-industry shifts and within-industry shifts reveals that the within-industry shifts were dominant in the 1980s. Second, cross-sectional regressions show that investment in computers has had a significant impact on increasing the share of the wage-bill held by nonproduction workers. These findings suggest that skill-biased technological change is at work in Japanese manufacturing industries. J. Japan. Int. Econ., September 2001, 15(3), pp. 298–322. Development Bank of Japan, 1-9-3 Otemachi, Chiyoda-ku, Tokyo 100-0004, Japan. Copyright 2001 Academic Press.Journal of Economic Literature Classification Numbers: J23, J31, O30.