My research focuses primarily on the long run economic development of Japan, using a quantitative and comparative approach.
This paper shows how wealth inequality was lower in East Asia than Western Europe over the very long-run, 1300-2000. A rich new dataset of village censuses in Japan, 1640-1870, and secondary evidence suggest Gini coefficients of wealth inequality in the East were 0.4-0.5 relative to 0.7-0.9 in the West preceding industrialization. Such regional patterns also precede the black death so any explanation must predate this. I propose the demographic institution of adoption as one such explanation. Adoption prevented the failure of male lines through which wealth was inherited. Adoption was practiced across Eurasia until the 5th century when the church began preaching against it. This increased household extinctions in Europe causing wealth concentration among surviving male lines. In contrast, the Japanese data suggest adoption prevented household extinctions and kept wealth in the family. Simulations show that this mechanism can explain much of the gap in regional wealth inequality.
The timing of the divergence between East Asia and Northwest Europe remains controversial. This stems from many potential errors in past wage measures. I overcome these issues for Japan by using wages of rural servants, the most common form of labor, for whom wages can be well measured. Using a new dataset of 1,661 servant wage contracts, I estimate an annual wage series for unskilled male and female laborers from 1600-1863. Wages fluctuated and were negative correlated with population growth and are consistent with a Malthusian interpretation. Throughout such fluctuations, Japanese male laborers consistently received less than half the wage of their English counterparts. Accounting for differences in female wages or other incomes do not explain the gap. This places Japan among the poorest societies ever observed. I also show past studies based on day wages are reliable and this together implies the divergence of Japan from England by 1380.
Despite its sophistication, Early Modern Japan, 1600-1868 had among the lowest real wage levels ever recorded, 40% of those in pre-industrial England. This paper shows that this puzzle can be partly resolved if we take into account the greater equality of land-holdings in pre-industrial Japan than in Europe. In England by 1700, 70% of the rural population were landless but in Japan only 13%. Paradoxically, as I show theoretically, in the Malthusian demographic regime of the pre-industrial world greater equality should generate lower living standards. I show empirically that landless families in Japan were unable to reproduce demographically. Had most households been landless, as in Europe, the population would have been unsustainable without higher wages. If, as many historians believe, high wages and living standards in western Europe explain the onset of the Industrial Revolution, then Japan’s failure to industrialize could have been shaped by its unusual pre-industrial equality.
The Benefit of Shocks? Risk and Living Standards in Early Modern Japan, 1600-1868