Productivity Change and Mine Dynamics: The Coal Industry in Japan during World War II

In the 1930s and 1940s, the Japanese coal industry experienced huge fluctuations in production and labor productivity. In this paper, I explore the micro-aspects of labor productivity change in the coal industry during World War II, using mine-level data, compiled from official statistics and original documents of the Coal Control Association (Sekitan Toseikai). The coal industry in this period was characterized by dynamic changes in market structure: a number of mines entered and exited the industry, and shares of incumbent mines changed substantially. These mine dynamics had significant productivity implications. In the early stage of the war, many low productivity mines entered the industry, which reduced average labor productivity considerably. The government and the Coal Control Association implemented a policy to concentrate resources and production on efficient mines during the war, which curbed the decline in average labor productivity. Despite the deteriorating environment during the war, coal production in Japan was maintained fairly well. One of the factors that made this possible was the policy of resource reallocation.