Abstract
In this paper, we study how labor shortage contributed to the rise of robots in the early stage of robotization in Japan from 1978 to 1991. Based on the newly digitalized industry-level data on labor shortage, we demonstrate that the shortage of unskilled factory workers is strongly positively associated with subsequent robot adoption. We also find the effect of the shortage of skilled factory workers on robot adoption to be negative, suggesting a potentially complementary role of skilled labor in the process of automation.
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