Factory Automation, Labor Demand, and Market Dynamics

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.

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Publication Details

Journal
RePEc: Research Papers in Economics
Published
2025-05-01
DOI
https://doi.org/10.7916/11qr-8p98
Primary Topic
Economic theories and models
Type
article
Field-Weighted Citation Impact
0.00
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article

Factory Automation, Labor Demand, and Market Dynamics

Tetsuji Okazaki, Daiji Kawaguchi, Xuanli Zhu
RePEc: Research Papers in Economics
Economic theories and models
article

Factory Automation, Labor Demand, and Market Dynamics

Tetsuji Okazaki, Daiji Kawaguchi, Xuanli Zhu
article en

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.

RePEc: Research Papers in Economics
Openalex Percentile: Top 65%
Economic theories and models
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