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Life Insurance, Natural Disasters, and Human Capital Investment: A Case of Early 20th Century Japan

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  • Tetsuji OKAZAKI
  • Toshihiro Okubo
  • Eric Strobl

Abstract

This paper examines the role of life insurance buffering negative income shocks on schooling. We focus on middle school grade promotion rates under earthquake disasters in early 20th century Japan. We constructed a dataset on grade promotions by gender, life insurance claims, and information on the deadliness of earthquakes, at the prefecture-level. The results of mediation analyses indicate that life insurance significantly buffered the negative impact of earthquakes on the promotion of boys to higher grades, while for girls the buffering effect of life insurance was mostly small and insignificant, which is consistent with the theoretical prediction.

Suggested Citation

  • Tetsuji OKAZAKI & Toshihiro Okubo & Eric Strobl, 2025. "Life Insurance, Natural Disasters, and Human Capital Investment: A Case of Early 20th Century Japan," CIGS Working Paper Series 25-010E, The Canon Institute for Global Studies.
    • Handle: RePEc:cnn:wpaper:25-010e
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    References listed on IDEAS

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    1. Okazaki, Tetsuji & Okubo, Toshihiro & Strobl, Eric, 2019. "Creative Destruction of Industries: Yokohama City in the Great Kanto Earthquake, 1923," The Journal of Economic History, Cambridge University Press, vol. 79(1), pages 1-31, March.
    2. Barro, Robert J & Friedman, James W, 1977. "On Uncertain Lifetimes," Journal of Political Economy, University of Chicago Press, vol. 85(4), pages 843-849, August.
    3. Ilan Noy & Toshihiro Okubo & Eric Strobl, 2023. "The Japanese textile sector and the influenza pandemic of 1918–1920," Journal of Regional Science, Wiley Blackwell, vol. 63(5), pages 1192-1227, November.
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