Technological progress boosts productivity and has made societies wealthier, but the impact of new digital technologies could be different from anything seen before. Some experts predict a future with robots and other forms of automation increasingly replacing workers, contributing to stagnant income, and worsening inequality. Yet it is difficult to pinpoint the net impact of advanced technologies on labor. There is anecdotal evidence that robotics and automation reduce manufacturing employment and wages, but evidence from the service sector remains scant. Collaborative research by APARC experts is now starting to fill this gap.

The researchers — including Karen Eggleston, APARC deputy director and director of the Asia Health Policy Program (AHPP), Yong Suk Lee, the deputy director of the Korea Program, and University of Tokyo health economist Toshiaki Iizuka, a former AHPP visiting scholar — set out to probe the impact of robots on services provided in nursing homes in Japan. Their study, one of the first investigations of service sector robots, offers an offset to the dystopian predictions of robot job replacement.

Published by the National Bureau of Economic Research, the study suggests that robot adoption has increased employment opportunities for non-regular care workers, helped mitigate the turnover problem that plagues nursing homes, and provided greater flexibility for workers. It is also published in AHPP's working paper series and is part of a broader research project by Eggleston, Lee, and Iizuka, that explores the impact of robots on nursing home care in Japan and the implications of robotic technologies adoption in aging societies.

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Japan has been on the front lines of a demographic crisis, grappling with a declining overall population, increasing proportion of seniors, and aversion to large-scale immigration. It has also been an early adopter of robots to address the shortage of care workers relative to a growing demand for long-term care services. Japan’s experience is especially instructive as more countries face aging populations, helping shed light on how demographics interact with new automation technologies.

In a VoxEU.org article, Eggleston, Lee, and Iizuka describe their study, its findings, and its implications. Examining the relationship between robot adoption and nursing home staffing in Japan, they find that robot-adopting nursing homes had between 3% and 8% more staff than their non-adopting counterparts. The increases in staffing occurred entirely among the non-regular employees. Nursing homes with robots also appeared to have higher management quality and were better able to reduce the burden on care workers. The results suggest “that the wave of technologies that inspires fear in many countries could help remedy the social and economic challenges posed by population aging in others.”

The Financial Times Magazine has recently featured the study by Eggleston, Lee, and Iizuka, calling it “groundbreaking in several ways but perhaps most clearly for setting its sights not on manufacturing but on the services sector, where robots are only just beginning to make their mark.” The great value of the study, the article notes, is that it lays the foundation for an empirical debate “on a subject that will be deluged with human emotion as robots continue their march into the services sector.”

You can also listen to a Financial Times podcast that features the new study (the segment starts at 4:52).