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Aging labor, ICT capital, and productivity in Japan and Korea

Author

Listed:
  • Jong-Wha Lee
  • Do Won Kwak
  • Eunbi Song

Abstract

This study examines how aging affects labor productivity using industry-level data of Japan and Korea. The analysis shows that, for both Japan and Korea, aging has positive effects on labor productivity when older workers are working in industries with a large share of information and communication technology (ICT) in the capital stock. We also find that, on average, older workers exert positive effects on labor productivity across all industries when they are low-educated in Japan and high-educated in Korea. In addition, a complementary effect between ICT capital and older workers is observed for both high- and low-educated workers in Japan but only for low-educated workers in Korea. We discuss the interplay among educational attainment, industry characteristics, and production techniques to explain the differences between the two countries in the productivity of their older workers.

Suggested Citation

  • Jong-Wha Lee & Do Won Kwak & Eunbi Song, 2020. "Aging labor, ICT capital, and productivity in Japan and Korea," CAMA Working Papers 2020-01, Centre for Applied Macroeconomic Analysis, Crawford School of Public Policy, The Australian National University.
    • Handle: RePEc:een:camaaa:2020-01
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    File URL: https://cama.crawford.anu.edu.au/sites/default/files/publication/cama_crawford_anu_edu_au/2020-01/1_2020_lee_kwak_song.pdf
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    Cited by:

    1. Vu, K. & Asongu, S., 2023. "Patterns and drivers of financial sector growth in the digital age: Insights from a study of industrialized economies," Research in International Business and Finance, Elsevier, vol. 66(C).
    2. Shahnazi, Rouhollah, 2021. "Do information and communications technology spillovers affect labor productivity?," Structural Change and Economic Dynamics, Elsevier, vol. 59(C), pages 342-359.
    3. Tooba Pervaiz Banday & Ekrem Erdem, 2024. "ICT and declining labor productivity in OECD," SN Business & Economics, Springer, vol. 4(3), pages 1-19, March.
    4. Chen Wu & Yang Cao & Hao Xu, 2025. "How Population Aging Drives Labor Productivity: Evidence from China," Sustainability, MDPI, vol. 17(11), pages 1-28, May.
    5. Lee, Dongyeol, 2021. "Propagation of economic shocks through vertical and trade linkages in Korea: An empirical analysis," Japan and the World Economy, Elsevier, vol. 60(C).
    6. Kim, Hoolda & Song Lee, Bun, 2023. "Aging workforce, wages, and productivity: Do older workers drag productivity down in Korea?," The Journal of the Economics of Ageing, Elsevier, vol. 24(C).
    7. Agus Salim & Jun Wen & Anas Usman Bello & Firsty Ramadhona Amalia Lubis & Rifki Khoirudin & Uswatun Khasanah & Lestari Sukarniati & Muhammad Safar Nasir, 2024. "Does information and communication technology improve labor productivity? Recent evidence from the Southeast Asian emerging economies," Growth and Change, Wiley Blackwell, vol. 55(1), March.
    8. Osathanunkul, Rossarin & Dumrong, Pasinee & Yamaka, Woraphon & Maneejuk, Paravee, 2023. "The nonlinear impacts of aging labor and government health expenditures on productivity in ASEAN+3 economies," Economic Analysis and Policy, Elsevier, vol. 80(C), pages 450-470.
    9. Aisa, Rosa & Cabeza, Josefina & Martin, Jorge, 2023. "Automation and aging: The impact on older workers in the workforce," The Journal of the Economics of Ageing, Elsevier, vol. 26(C).
    10. Higo, Masahiro, 2023. "What caused the downward trend in Japan’s labor share?," Japan and the World Economy, Elsevier, vol. 67(C).
    11. Xiao Lin & Zhengfeng Huang & Yun Ye & Jingxin Dong & Hongxiang Feng & Pengjun Zheng, 2023. "Effects of Aging on Taxi Service Performance: A Comparative Study Based on Different Age Groups," Sustainability, MDPI, vol. 15(22), pages 1-20, November.
    12. Zhong, Mei-Rui & Cao, Meng-Yuan & Zou, Han, 2022. "The carbon reduction effect of ICT: A perspective of factor substitution," Technological Forecasting and Social Change, Elsevier, vol. 181(C).
    13. Otsu, Keisuke & Shibayama, Katsuyuki, 2022. "Population aging, government policy and the postwar Japanese economy," Journal of the Japanese and International Economies, Elsevier, vol. 64(C).
    14. Zhang, Sheng-Hao & Yang, Jun & Cheng, Jixin & Li, Xiaoming, 2025. "Exploring the carbon rebound effect of digitalization and policy responses: A CDEEEA/CGE based analysis," Energy Economics, Elsevier, vol. 141(C).
    15. Lee, Jong-Wha & Kwak, Do Won & Song, Eunbi, 2022. "Can older workers stay productive? The role of ICT skills and training," Journal of Asian Economics, Elsevier, vol. 79(C).
    16. Nam, Jinyoung & Kim, Seongcheol, 2022. "Why do elderly people feel negative about the use of self-service technology and how do they cope with the negative emotions?," 31st European Regional ITS Conference, Gothenburg 2022: Reining in Digital Platforms? Challenging monopolies, promoting competition and developing regulatory regimes 265661, International Telecommunications Society (ITS).

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    Keywords

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    JEL classification:

    • J11 - Labor and Demographic Economics - - Demographic Economics - - - Demographic Trends, Macroeconomic Effects, and Forecasts
    • J14 - Labor and Demographic Economics - - Demographic Economics - - - Economics of the Elderly; Economics of the Handicapped; Non-Labor Market Discrimination
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East

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