In one of the first studies of service sector robotics using establishment-level data, we study the relationship between robots and staffing in Japanese nursing homes. We utilize variation in robot subsidies across prefectures as an instrumental variable to explore the impact of robot adoption on nursing homes’ staffing decisions. We find that robot adoption appears to decrease difficulty in staff retention and to increase employment by augmenting the number of care workers and nurses on flexible employment contracts. Robot adoption is negatively correlated with the monthly wages of regular nurses, consistent with reduced burden of care such as fewer night shifts. Our findings suggest that robots may not be detrimental to labor and may help to remedy challenges posed by rapidly aging populations.

JEL Code: I11, J14, J23, O30,
Key words: Robots, jobs, nursing homes, automation, aging, healthcare