The Factor Bias and the Hicks Induced Innovation Hypothesis

Abstract

One of the most remarkable changes in Japanese agriculture since the late-1950s has been a drastic decline in labor with dramatic increases in machinery and intermediate input, as seen in Figure 1.3 presented in Chapter 1.¹ These changes in relative factor uses in agricultural production have played important roles in the process of economic growth, not only in the agricultural but also in the non-agricultural sectors. In agriculture, the drastic declines in labor have increased the levels of labor productivity at a fairly high rate of about 3 per cent per year on average for the entire study period 1957–97.² At the same time, the tremendous migratory inflow has also contributed significantly to the growth of the non-agricultural sectors, in particular during the 1957–75 period.