HAI Virtual Community - The Impact of Robots on Staffing in Nursing Homes
Live Virtual Event
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Karen Eggleston, Senior Fellow, Freeman Spogli Institute for International Studies; Center Fellow, Center for Health Policy and the Center for Primary Care and Outcomes Research; Faculty Research Fellow, National Bureau of Economic Research
Karen Eggleston is Senior Fellow at the Freeman Spogli Institute for International Studies (FSI) at Stanford University, Director of the Stanford Asia Health Policy Program and Deputy Director of the Walter H. Shorenstein Asia-Pacific Research Center at FSI. She is also a Fellow with the Center for Innovation in Global Health at Stanford University School of Medicine, and a Faculty Research Fellow of the National Bureau of Economic Research (NBER). Eggleston earned her PhD in public policy from Harvard University in 1999. She has MA degrees in economics and Asian studies from the University of Hawaii and a BA in Asian studies summa cum laude (valedictorian) from Dartmouth College. Eggleston studied in China for two years and was a Fulbright scholar in Korea. Her research focuses on government and market roles in the health sector and Asia health policy, especially in China, India, Japan, and Korea; healthcare productivity; and the economics of the demographic transition. She served on the Strategic Technical Advisory Committee for the Asia Pacific Observatory on Health Systems and Policies, and has been a consultant to the World Bank, the Asian Development Bank, and the World Health Organization regarding health system reforms in China.
Yong Suk Lee, SK Center Fellow, Freeman Spogli Institute for International Studies; Deputy Director, Korea Program at Shorenstein APARC
Yong Suk Lee is the SK Center Fellow at the Freeman Spogli Institute for International Studies and Deputy Director of the Korea Program at the Walter H. Shorenstein Asia-Pacific Research Center at Stanford University. Lee’s main fields of research are in labor economics, technology and entrepreneurship, and urban economics. Some of the issues he has studied include technology and labor markets, entrepreneurship and economic growth, entrepreneurship education, and education and inequality. He is also interested in both the North and South Korean economy and has examined how economic sanctions affect economic activity in North Korea, and how management practices and education policy affect inequality in South Korea. His current research focuses on how the new wave of digital technologies will affect labor, education, entrepreneurship, and productivity, and he is pursuing several projects in this regard. His research has been published in both Economics and Management journals including the Journal of Urban Economics, Journal of Economic Geography, Journal of Business Venturing, Journal of Health Economics, and Labour Economics. Lee also regularly contributes to policy reports and opinion pieces on contemporary issues surrounding both North and South Korea.
Most studies of automation focus on manufacturing or use aggregate data. In one of the first studies of the service sector using establishment-level data, we examine the impact of robot adoption on staffing in nursing homes. This setting is important, because robots are increasingly being adopted in many countries to address the challenges posed by population aging. Japan, in particular, has been actively developing and deploying robots in nursing homes to deal with labor shortages, and since 2015 has subsidized nursing home purchase of robots. Analyzing 2017 data from Japanese nursing homes, we document that facilities that adopt robots are larger, with more functionally-impaired residents, greater numbers of care workers and nurses, many other assistive technologies, better management practices, and located in prefectures with higher planned subsidies for robots per nursing home. However, using variation in those robot subsidies as an instrumental variable, we find that robot adoption has little causal impact on overall staffing or wages, but leads to additional non-regular nurse hours, and increasing turnover of regular care workers. Robot adoption also reduces the wage share, consistent with compositional change in staffing toward non-regular workers. The tight labor market in Japan appears to have prompted nursing homes to adopt a more capital-intensive production process without many detrimental effects on labor. Our results contrast with recent findings that show negative effects of robots on employment and wages in the US manufacturing sector, suggesting that the impact of robots likely differs by labor market conditions and industry.