Aging labor, ICT capital, and productivity in Japan and Korea

This study examines how aging affects labor productivity using industry-level data of Japan and Korea. The analysis shows that, for both Japan and Korea, aging has positive effects on labor productivity when older workers are working in industries with a large share of information and communication technology (ICT) in the capital stock. We also find that, on average, older workers exert positive effects on labor productivity across all industries when they are low-educated in Japan and high-educated in Korea. In addition, a complementary effect between ICT capital and older workers is observed for both highand low-educated workers in Japan but only for low-educated workers in Korea. The complementarity between ICT and old workers existed in both manu-facturing and services industries of Korea and Japan.