NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

The Depressing Effect of Agricultural Institutions on the Prewar Japanese Economy

Fumio Hayashi, Edward C. Prescott

NBER Working Paper No. 12081
Issued in March 2006
NBER Program(s):   EFG   PR

The question we address in this paper is why the Japanese miracle didn't take place until after World War II. For much of the pre-WWII period, Japan's real GNP per worker was not much more than a third of that of the U.S., with falling capital intensity. We argue that its major cause is a barrier that kept agricultural employment constant at about 14 million throughout the prewar period. In our two-sector neoclassical growth model, the barrier-induced sectoral mis-allocation of labor and a resulting disincentive for capital accumulation account well for the depressed output level. Were it not for the barrier, Japan's prewar GNP per worker would have been close to a half of the U.S. The labor barrier existed because, we argue, the prewar patriarchy, armed with paternalistic clauses in the prewar Civil Code, forced the son designated as heir to stay in agriculture.

download in pdf format
   (725 K)

email paper

This paper is available as PDF (725 K) or via email.

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w12081

Published: Hayashi, Fumio and Edward C. Prescott. “The Depressing Effect of Agricultural Institutions on the Prewar Japanese Economy.” Journal of Political Economy 116, 4 (August 2008): 573-632.

Users who downloaded this paper also downloaded these:
Gilmore and Hayashi w14528 Emerging Market Currency Excess Returns
Gorton, Hayashi, and Rouwenhorst w13249 The Fundamentals of Commodity Futures Returns
Honma Japan’s Agricultural Policy and Protection Growth
Cheremukhin, Golosov, Guriev, and Tsyvinski w19425 Was Stalin Necessary for Russia's Economic Development?
Hayashi and Nomura w11749 Can IT be Japan's Savior?
 
Publications
Activities
Meetings
Data
People
About

Support
National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us