The Impact of Computerization on Regular Employment

This paper uses micro data from the Basic Survey of Japanese Business Structure and Activity to analyze the effects of companies' introduction of information and telecommunications technology on employment structures, especially regular versus non-regular employment. Firstly, examination of trends in the ratio of part-time workers recorded in the Basic Survey shows that part-time worker ratios in manufacturing firms are rising slightly, but that companies with a high proportion of part-timers tend to have fewer employees than other firms in the manufacturing industry. This contrasts with the retail industry, where the proportion of part-timers is rising rapidly in all companies, and firms with a high proportion of part-timers also occupy a rapidly rising share of overall employee numbers in the industry. As a result, just as the aggregate data indicate, the proportion of part-timers in the retail industry is expanding at quite a rapid pace. Using a regression method derived from the neo-classical production model, the paper also identifies the impact of computerization on regular employment ratios, considering the substitution relationship between regular and non-regular employment. This analysis suggests the possibility that in industries other than machinery manufacturing, the progress of computerization is a technological change that enables companies to reduce the number of regular positions. It also indicates that as a result of digitization of work and changes to internal information processing systems with the introduction of information and telecommunications technology, the advantages held by regular employees - i.e. that they are well-versed in the work and have built up human networks within the organization - may be diminished.