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Factory Automation, Labor Demand, and Market Dynamics

Author

Listed:
  • Daiji Kawaguchi

    (Faculty of Economics, The University of Tokyo)

  • Tetsuji Okazaki

    (, The University of Tokyo)

  • Xuanli Zhu

    (Faculty of Economics, The University of Tokyo)

Abstract

This study provides micro-level evidence on the labor market effects of historical au- tomation technology by studying early 20th century powerloom adoption in Japan’s silk-weaving industry. Relative to non-adopting factories in the same area, adopting factories employed more male mechanics but did not reduce female weaver employ- ment. Meanwhile, wages rose only modestly despite large productivity gains. At the industry level, however, the exit of low-wage, low-productivity plants led to sub- stantial net job losses—“technological unemployment†—and stronger overall wage growth. Nature of the technology, monopsony power, and market competition were all important in shaping these outcomes.

Suggested Citation

  • Daiji Kawaguchi & Tetsuji Okazaki & Xuanli Zhu, 2025. "Factory Automation, Labor Demand, and Market Dynamics," CIRJE F-Series CIRJE-F-1249, CIRJE, Faculty of Economics, University of Tokyo.
    • Handle: RePEc:tky:fseres:2025cf1249
    as

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    File URL: http://www.cirje.e.u-tokyo.ac.jp/research/dp/2025/2025cf1249.pdf
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    References listed on IDEAS

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