How sectoral technical progress and factor substitution shaped Japan's structural transformation?

Arbeitspapier

The paper quantitatively assesses the importance of supply-side drivers in the transition of the Japanese economy from low-skilled to high-skilled sectors and its implication for growth, labor demand and labor income shares. A sectoral supply-side system, estimated over the 1980-2012 period, reveals different rates of technical progress across production factors and sectors, but also heterogeneity in the sectoral elasticity of substitution between capital and labor. The fact that capital and labor are easily substitutable in low-skilled services but not in high-skilled services, coupled with the dominant role of capital-augmenting technical change in services is a key factor behind the relocation of labor towards high-skilled services, as well as behind the declining trend in the labor income share in low-skilled services.

Object Details

• ISBN: 978-92-899-4974-3
• Language: Englisch

References and Relationships

• Bibliographic citation: Series: ECB Working Paper ; No. 2641

Classification and Topics

• Classification: Wirtschaft ; Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence ; Technological Change: Choices and Consequences; Diffusion Processes ; Labor Demand
• Subject: CES production function ; biased technical change ; labor demand ; labor income share

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Manu, Ana-Simona
• Event: Veröffentlichung
• (who): European Central Bank (ECB)
• (where): Frankfurt a. M.
• (when): 2022

Further information

• DOI: doi:10.2866/736980
• Handle: http://hdl.handle.net/10419/261175
• Last update: 10.03.2025, 11:44 AM CET