My research focuses primarily on the long run economic development of Japan, using a quantitative and comparative approach.
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.
Unskilled day wage series in Asia have been controversial due to uncertainties associated with pay and representativeness in society. I overcome these issues for Japan by using wages received by servants, the most common form of labor, for whom wages have less ambiguities and can be well measured. Using a new dataset of 1,661 servant wages in rural Japan, I estimate annual wage series for unskilled male and female laborers from 1600-1863. I find that worker wages reached an extreme low in the early 18th century, when laborers earned enough to feed only 1.5-2 adults on rice. The higher level of female wages, at 75% of the male wage in Japan compared to 50% in England, may have partially compensated for the lower wages in Japan. However, Japanese household wage incomes were still at half the English level placing Japan among the poorest societies observed in history.
How important are inter-generational transfers in explaining inequality? I look at the case of rural Japan, 1694-1872, a highly equal society in the early modern period. Using inter-generational data on household land ownership in 30 villages, I explore three channels through which land inequality was transmitted across generations: wealth mobility, inheritance, and extinction. Consistent with the modern literature, I find that higher levels of wealth mobility partially explains the relative equality of Japan. Further, I explore how household formation and extinction was gradually changing the household composition of the village. Partible inheritance was practiced by rich households resulting in dispersion of wealth among the rich. Simultaneously, the poor faced high probabilities of household extinction due to the lack of heirs which decreased inequality. The latter two mechanisms have received little attention in the literature but may have played a large role in sustaining the unusual equality of early modern Japan.
Harvest Shocks and Living Standards