Effects of Information Technology on Labor Demand and Technological Progress in Japanese Manufacturing: 1980-1998

The Japanese economy is in the midst of a fundamental change driven by two economic forces: aging population and rapid progress in information and communication technology. Population aging has attracted much discussion, mostly with respect to their impacts on the macroeconomic future of the Japanese economy in such issues as sustainable pension and health care systems and the optimal policy mix of debts and taxes to finance government expenditure. Technological progress in information and communication has also been a hot issue both politically and economically, but most discussion has been concentrated on its microeconomic impacts on the Japanese industries. However, these two factors may interact each other in a very important way. Rapid advance of information and communication technology may imply a drastic change in work place and job structure, which may alter the impact of aging work force. Technological advancement in information and communication