AI's Effect on Japan's Macroeconomic Productivity

Published Date : 13/01/2025 

Using data from original surveys, this study estimates a 0.5-0.6% boost to labour productivity at the macro level due to the adoption of AI in the workplace. The impact is expected to grow as AI adoption increases. 

With the rapid diffusion of artificial intelligence (AI), its impacts on productivity and the labour market have attracted significant attention.

While many studies have explored the impact of industrial robots on productivity, the quantitative effects of AI are still not well understood due to a lack of statistical data on its usage.

Research DesignTo estimate the impact of AI on macroeconomic productivity in Japan, I conducted surveys in September 2023 and October 2024 targeting workers aged 20 and older.

The 2023 survey had 13,150 respondents, and the 2024 follow-up survey had 8,633 respondents, with 8,269 valid responses used in the analysis.

The survey collected data on the use of AI at work, the percentage of tasks performed using AI, and the effect of AI on work efficiency.

Additional information on respondents' demographics, industry, occupation, and earnings was also gathered.

Productivity Impacts of AIThe number of workers using AI increased from 5.8% in 2023 to 8.3% in 2024, a 1.5 times increase.

On average, AI users perform 15.1% of their tasks using AI, with an efficiency gain of 25.9%, resulting in a 5.6% overall productivity increase.

The macroeconomic impact, weighted by annual earnings, is a 0.58% boost to labour productivity, or about 0.3% in total factor productivity (TFP) when adjusted for the labour share.

Future ImplicationsAbout 28% of respondents expect to start using AI in the future, suggesting a continued rise in AI adoption.

If AI usage patterns remain constant, the macroeconomic impact on labour productivity could quadruple, reaching about 2%.

However, new AI users tend to have lower AI_Taskshare and AI_Efficiency compared to continuous users, indicating that the initial high productivity gains may diminish over time.

Labour Market InequalityHighly educated and high-wage workers are more likely to use AI.

While the productivity effects are similar across different worker categories, the higher AI adoption rate among more educated and higher-earning workers suggests that AI diffusion could widen labour market inequality in the near future.

ConclusionThe study provides a comprehensive overview of AI usage and its impact on productivity in Japan.

While the current impact is moderate, the potential for future growth is significant.

However, the varying effects on different worker groups highlight the need for careful policy considerations to ensure equitable benefits. 

Frequently Asked Questions (FAQS):

Q: What is the current estimated impact of AI on labour productivity in Japan?

A: The current estimated impact of AI on labour productivity in Japan is a 0.5-0.6% boost.

Q: How was the data for this study collected?

A: The data was collected through surveys conducted in September 2023 and October 2024, targeting workers aged 20 and older in Japan.

Q: What percentage of workers are currently using AI at work?

A: As of 2024, 8.3% of workers are using AI at work, up from 5.8% in 2023.

Q: How does AI usage affect work efficiency?

A: On average, AI users report a 25.9% increase in work efficiency, leading to a 5.6% overall productivity increase.

Q: What are the potential future impacts of AI on productivity?

A: If AI usage patterns remain constant, the macroeconomic impact on labour productivity could reach about 2% in the future, but the initial high productivity gains may diminish over time. 

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