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Human Capital and Economic Growth in Japan: 1885-2015

Author

Listed:
  • Fukao, Kyoji
  • Settsu, Tokihiko
  • Makino, Tatsuji

Abstract

This study presents growth account for Japan for the 130 years from 1885 to 2015 based on the measurement of labor quality simultaneously taking the effects of education and the allocation of labor across industries into account. The estimation results indicate that, over the 130 years, Japanʼs labor productivity rose 46-fold, with increases in the capital-labor ratio accounting for 39 percent of this rise, improvements in labor quality for 25 percent, and TFP growth for 36 percent. Looking at the periods before and after World War II separately, we found that labor productivity growth accelerated substantially in the postwar period and was twice as high as in the prewar period. This difference in labor productivity growth can be explained by differences in the sources of growth: while growth during the prewar period was driven mainly by improvements in labor quality with a growth contribution of 37 percent, during the postwar period increases in the capital-labor ratio and TFP growth made the largest contribution（42 percent and 39 percent, respectively）.

Suggested Citation

  • Fukao, Kyoji & Settsu, Tokihiko & Makino, Tatsuji, 2020. "Human Capital and Economic Growth in Japan: 1885-2015," Economic Review, Hitotsubashi University, vol. 71(2), pages 175-204, April.
    • Handle: RePEc:hit:ecorev:v:71:y:2020:i:2:p:175-204
    DOI: 10.15057/31239
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    Cited by:

    1. Byaro, Mwoya & Pelizzo, Riccardo & Kinyondo, Abel, 2023. "What are the Main Drivers Behind the Acceleration of Tanzania's Economic Growth Over the Past Three Decades?," African Journal of Economic Review, African Journal of Economic Review, vol. 11(4), June.
    2. Leandro Prados de la Escosura & Joan R. Rosés, 2021. "Accounting For Growth: Spain, 1850–2019," Journal of Economic Surveys, Wiley Blackwell, vol. 35(3), pages 804-832, July.
    3. Benjamin Musiita & Frederick Nsambu Kijjambu & Ruth Nyiramahoro, 2025. "Human Capital, Fixed Capital Formation and Economic Growth: An Empirical Analysis of Endogenous Growth Drivers in Uganda," Journal of Economics and Behavioral Studies, AMH International, vol. 17(1), pages 82-95.
    4. Stephen Broadberry & Kyoji Fukao & Tokihiko Settsu, 2025. "How Did Japan Catch-Up With the West? Some Implications or Recent Revisions to Japan’s Historical Growth Record," Oxford Economic and Social History Working Papers _216, University of Oxford, Department of Economics.
    5. Ibrahim, Ridwan Lanre & Al-mulali, Usama & Ozturk, Ilhan & Bello, Ajide Kazeem & Raimi, Lukman, 2022. "On the criticality of renewable energy to sustainable development: Do green financial development, technological innovation, and economic complexity matter for China?," Renewable Energy, Elsevier, vol. 199(C), pages 262-277.
    6. BROADBERRY, Stephen & FUKAO, Kyoji & SETTSU, Tokihiko, 2025. "How Did Japan Catch-up ｗith the West? Some Implications of Recent Revisions to Japan’s Historical Growth Record," Discussion Paper Series 763, Institute of Economic Research, Hitotsubashi University.
    7. Zou, Chengzhang & Gao, Weizhen & Ai, Fengyi, 2025. "Strategic mineral policies for Indonesia: Enhancing global competitiveness, economic growth, and environmental sustainability through innovation and renewable energy," Renewable Energy, Elsevier, vol. 244(C).
    8. Nobuya Fukugawa, 2022. "Effects of the quality of science on the initial public offering of university spinoffs: evidence from Japan," Scientometrics, Springer;Akadémiai Kiadó, vol. 127(8), pages 4439-4455, August.
    9. Thomas H. W. Ziesemer, 2024. "Mission-oriented R&D and growth of Japan 1988–2016: a comparison with private and public R&D," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 33(2), pages 218-247, February.
    10. Sue Abdinnour & Sesan Oluseyi Adeniji, 2023. "Empirical analysis of the impact of entrepreneurial activity on economic growth of Global Entrepreneurship Monitor (GEM) countries," Journal of Global Entrepreneurship Research, Springer;UNESCO Chair in Entrepreneurship, vol. 13(1), pages 1-11, December.
    11. Yujue Wang & Nur Syazwani Mazlan & Wan Azman Saini Wan Ngah & Muhammad Faheem & Yifan Liang, 2024. "Financial development and economic growth in Asian countries: evidence from the DCCE approach," Eurasian Economic Review, Springer;Eurasia Business and Economics Society, vol. 14(2), pages 397-420, June.
    12. Zhao Li & Yujing Chu, 2023. "Is Hierarchical Education Investment Synergistic? Evidence from China’s Investment in General and Advanced Education," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 14(2), pages 1522-1537, June.
    13. Mmbaga, Nanzia F. & Kulindwa, Yusuph & Kazungu, Isaac, 2023. "Energy Consumption and Economic Growth Nexus in East African Sub-Region: Interactive Dynamics of Human Capital," African Journal of Economic Review, African Journal of Economic Review, vol. 11(5), December.

    More about this item

    JEL classification:

    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • I25 - Health, Education, and Welfare - - Education - - - Education and Economic Development
    • N15 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - Asia including Middle East

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