IDEAS home Printed from https://ideas.repec.org/p/tse/iastwp/126841.html
   My bibliography  Save this paper

How Landownership Equality Created a Low Wage Society: Pre-industrial Japan, 1600-1870

Author

Listed:
  • Kumon, Yuzuru

Abstract

Despite its sophistication, Early Modern Japan, 1600-1868, had among the lowest real wage levels ever recorded, half of those in pre-industrial England. This paper resolves this puzzle by considering the more equal landownership distribution in Japan relative to Europe. Due to institutional differences in land transmission, most of the rural population were landless in England but only 16% in Japan circa 1800. Using a Malthusian model, I show landownership equality in Japan paradoxically generated lower wages and GDP per capita. This is due to the concavity in the positive income-fertility curve resulting in greater equality generating greater population pressures. I provide evidence of the mechanism at the cross-country level and at the individual level using Japanese village censuses. If, as many historians believe, high wages in western Europe explain the onset of the Industrial Revolution, then Japan’s failure to industrialize first could have been shaped by its unusual pre-industrial equality.

Suggested Citation

  • Kumon, Yuzuru, 2022. "How Landownership Equality Created a Low Wage Society: Pre-industrial Japan, 1600-1870," IAST Working Papers 22-138, Institute for Advanced Study in Toulouse (IAST).
  • Handle: RePEc:tse:iastwp:126841
    as

    Download full text from publisher

    File URL: http://iast.fr/pub/126841
    File Function: null
    Download Restriction: no

    File URL: https://www.iast.fr/sites/default/files/IAST/wp/wp_iast_138.pdf
    File Function: Full Text
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Kiminori Matsuyama, 2002. "The Rise of Mass Consumption Societies," Journal of Political Economy, University of Chicago Press, vol. 110(5), pages 1035-1070, October.
    2. Cinnirella, Francesco & Hornung, Erik, 2016. "Landownership concentration and the expansion of education," Journal of Development Economics, Elsevier, vol. 121(C), pages 135-152.
    3. Daniel Halter & Manuel Oechslin & Josef Zweimüller, 2014. "Inequality and growth: the neglected time dimension," Journal of Economic Growth, Springer, vol. 19(1), pages 81-104, March.
    4. David de la Croix & Matthias Doepke & Joel Mokyr, 2018. "Clans, Guilds, and Markets: Apprenticeship Institutions and Growth in the Preindustrial Economy," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 133(1), pages 1-70.
    5. Oded Galor & Omer Moav, 2004. "From Physical to Human Capital Accumulation: Inequality and the Process of Development," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 71(4), pages 1001-1026.
    6. Alfani, Guido & Gierok, Victoria & Schaff, Felix, 2022. "Economic Inequality in Preindustrial Germany, ca. 1300–1850," The Journal of Economic History, Cambridge University Press, vol. 82(1), pages 87-125, March.
    7. Hans-Joachim Voth, 2013. "The Three Horsemen of Riches: Plague, War, and Urbanization in Early Modern Europe," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 80(2), pages 774-811.
    8. Easterly, William, 2007. "Inequality does cause underdevelopment: Insights from a new instrument," Journal of Development Economics, Elsevier, vol. 84(2), pages 755-776, November.
    9. Arimoto, Yutaka & Kurosu, Satomi, 2015. "Land and labor reallocation in pre-modern Japan : a case of a northeastern village in 1720-1870," IDE Discussion Papers 519, Institute of Developing Economies, Japan External Trade Organization(JETRO).
    10. Robert C. Allen & Jean-Pascal Bassino & Debin Ma & Christine Moll-Murata & Jan Luiten Van Zanden, 2011. "Wages, prices, and living standards in China, 1738–1925: in comparison with Europe, Japan, and India," Economic History Review, Economic History Society, vol. 64, pages 8-38, February.
    11. Deininger, Klaus & Squire, Lyn, 1998. "New ways of looking at old issues: inequality and growth," Journal of Development Economics, Elsevier, vol. 57(2), pages 259-287.
    12. Greif, Avner & Tabellini, Guido, 2017. "The clan and the corporation: Sustaining cooperation in China and Europe," Journal of Comparative Economics, Elsevier, vol. 45(1), pages 1-35.
    13. Daron Acemoglu & Davide Ticchi & Andrea Vindigni, 2011. "Emergence And Persistence Of Inefficient States," Journal of the European Economic Association, European Economic Association, vol. 9(2), pages 177-208, April.
    14. Kumon, Yuzuru, 2021. "The Deep Roots of Inequality," IAST Working Papers 21-125, Institute for Advanced Study in Toulouse (IAST).
    15. Alberto Alesina & Dani Rodrik, 1994. "Distributive Politics and Economic Growth," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 109(2), pages 465-490.
    16. Andrew Berg & Jonathan D. Ostry & Charalambos G. Tsangarides & Yorbol Yakhshilikov, 2018. "Redistribution, inequality, and growth: new evidence," Journal of Economic Growth, Springer, vol. 23(3), pages 259-305, September.
    17. Nico Voigtl?nder & Hans-Joachim Voth, 2013. "How the West "Invented" Fertility Restriction," American Economic Review, American Economic Association, vol. 103(6), pages 2227-2264, October.
    18. Osamu Saito, 2015. "Growth and inequality in the great and little divergence debate: a Japanese perspective," Economic History Review, Economic History Society, vol. 68(2), pages 399-419, May.
    19. Oechslin, Manuel & Halter, David, 2010. "Inequality and Growth: The Neglected Time Dimension," CEPR Discussion Papers 8033, C.E.P.R. Discussion Papers.
    20. Colin Heywood, 1981. "The Role of the Peasantry in French Industrialization, 1815–80," Economic History Review, Economic History Society, vol. 34(3), pages 359-376, August.
    21. Osamu Saito & Masanori Takashima, 2016. "Estimating the shares of secondary- and tertiary-sector outputs in the age of early modern growth: the case of Japan, 1600–18741," European Review of Economic History, European Historical Economics Society, vol. 20(3), pages 368-386.
    22. Carter, Michael R. & Lybbert, Travis J., 2012. "Consumption versus asset smoothing: testing the implications of poverty trap theory in Burkina Faso," Journal of Development Economics, Elsevier, vol. 99(2), pages 255-264.
    23. Allen,Robert C., 2009. "The British Industrial Revolution in Global Perspective," Cambridge Books, Cambridge University Press, number 9780521868273, November.
    24. Gregory Clark & Neil Cummins & Matthew Curtis, 2020. "Twins Support the Absence of Parity-Dependent Fertility Control in Pretransition Populations," Demography, Springer;Population Association of America (PAA), vol. 57(4), pages 1571-1595, August.
    25. Yuzuru Kumon, 2020. "The Labor Intensive Path: Wages, Incomes and the Work Year in Japan, 1610-1932," CIRJE F-Series CIRJE-F-1154, CIRJE, Faculty of Economics, University of Tokyo.
    26. Oded Galor & Omer Moav & Dietrich Vollrath, 2009. "Inequality in Landownership, the Emergence of Human-Capital Promoting Institutions, and the Great Divergence," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 76(1), pages 143-179.
    27. Allen, Robert C., 2001. "The Great Divergence in European Wages and Prices from the Middle Ages to the First World War," Explorations in Economic History, Elsevier, vol. 38(4), pages 411-447, October.
    28. Dietrich Vollrath, 2011. "The agricultural basis of comparative development," Journal of Economic Growth, Springer, vol. 16(4), pages 343-370, December.
    29. Alfani, Guido, 2015. "Economic Inequality in Northwestern Italy: A Long-Term View (Fourteenth to Eighteenth Centuries)," The Journal of Economic History, Cambridge University Press, vol. 75(4), pages 1058-1096, December.
    30. Nico Voigtländer & Hans-Joachim Voth, 2006. "Why England? Demographic factors, structural change and physical capital accumulation during the Industrial Revolution," Journal of Economic Growth, Springer, vol. 11(4), pages 319-361, December.
    31. Guido Alfani & Francesco Ammannati, 2017. "Long‐term trends in economic inequality: the case of the Florentine state, c. 1300–1800," Economic History Review, Economic History Society, vol. 70(4), pages 1072-1102, November.
    32. Nicolini, Esteban A., 2007. "Was Malthus right? A VAR analysis of economic and demographic interactions in pre-industrial England," European Review of Economic History, Cambridge University Press, vol. 11(1), pages 99-121, April.
    33. Palma, Nuno & Reis, Jaime, 2019. "From Convergence to Divergence: Portuguese Economic Growth, 1527–1850," The Journal of Economic History, Cambridge University Press, vol. 79(2), pages 477-506, June.
    34. Clark, Gregory & Hamilton, Gillian, 2006. "Survival of the Richest: The Malthusian Mechanism in Pre-Industrial England," The Journal of Economic History, Cambridge University Press, vol. 66(3), pages 707-736, September.
    35. Judy Z. Stephenson, 2018. "‘Real’ wages? Contractors, workers, and pay in London building trades, 1650–1800," Economic History Review, Economic History Society, vol. 71(1), pages 106-132, February.
    36. Vries,Jan de, 2008. "The Industrious Revolution," Cambridge Books, Cambridge University Press, number 9780521719254, November.
    37. Sharp, Paul & Strulik, Holger & Weisdorf, Jacob, 2012. "The determinants of income in a Malthusian equilibrium," Journal of Development Economics, Elsevier, vol. 97(1), pages 112-117.
    38. Dennison,Tracy, 2011. "The Institutional Framework of Russian Serfdom," Cambridge Books, Cambridge University Press, number 9780521194488, November.
    39. Rota, Mauro & Weisdorf, Jacob, 2020. "Italy and the Little Divergence in Wages and Prices: New Data, New Results," The Journal of Economic History, Cambridge University Press, vol. 80(4), pages 931-960, December.
    40. Kelly, Morgan & Ó Gráda, Cormac, 2012. "The Preventive Check in Medieval and Preindustrial England," The Journal of Economic History, Cambridge University Press, vol. 72(4), pages 1015-1035, December.
    41. Clark, Gregory & Hamilton, Gillian, 2006. "Survival of the Richest: The Malthusian Mechanism in Pre-Industrial England," The Journal of Economic History, Cambridge University Press, vol. 66(03), pages 707-736, September.
    42. Madsen, Jakob B. & Robertson, Peter E. & Ye, Longfeng, 2019. "Malthus was right: Explaining a millennium of stagnation," European Economic Review, Elsevier, vol. 118(C), pages 51-68.
    43. David N. Weil & Oded Galor, 2000. "Population, Technology, and Growth: From Malthusian Stagnation to the Demographic Transition and Beyond," American Economic Review, American Economic Association, vol. 90(4), pages 806-828, September.
    44. Persson, Torsten & Tabellini, Guido, 1994. "Is Inequality Harmful for Growth?," American Economic Review, American Economic Association, vol. 84(3), pages 600-621, June.
    45. Zimmerman, Frederick J. & Carter, Michael R., 2003. "Asset smoothing, consumption smoothing and the reproduction of inequality under risk and subsistence constraints," Journal of Development Economics, Elsevier, vol. 71(2), pages 233-260, August.
    46. Brandt, Loren & Sands, Barbara, 1990. "Beyond Malthus and Ricardo: Economic Growth, Land Concentration, and Income Distribution in Early Twentieth-Century Rural China," The Journal of Economic History, Cambridge University Press, vol. 50(4), pages 807-827, December.
    47. Gregory Clark, 2007. "The long march of history: Farm wages, population, and economic growth, England 1209–18691," Economic History Review, Economic History Society, vol. 60(1), pages 97-135, February.
    48. Barro, Robert J, 2000. "Inequality and Growth in a Panel of Countries," Journal of Economic Growth, Springer, vol. 5(1), pages 5-32, March.
    49. Milanovic, Branko, 2000. "The median-voter hypothesis, income inequality, and income redistribution: an empirical test with the required data," European Journal of Political Economy, Elsevier, vol. 16(3), pages 367-410, September.
    50. Kenneth L. Sokoloff & Stanley L. Engerman, 2000. "Institutions, Factor Endowments, and Paths of Development in the New World," Journal of Economic Perspectives, American Economic Association, vol. 14(3), pages 217-232, Summer.
    51. Gregory Clark, 2001. "Farm Wages and Living Standards in the Industrial Revolution: England,1670–1869[This resea]," Economic History Review, Economic History Society, vol. 54(3), pages 477-505, August.
    52. Lupu, Noam & Pontusson, Jonas, 2011. "The Structure of Inequality and the Politics of Redistribution," American Political Science Review, Cambridge University Press, vol. 105(2), pages 316-336, May.
    53. Broadberry, Stephen & Guan, Hanhui & Li, David Daokui, 2018. "China, Europe, and the Great Divergence: A Study in Historical National Accounting, 980–1850," The Journal of Economic History, Cambridge University Press, vol. 78(4), pages 955-1000, December.
    54. Vries,Jan de, 2008. "The Industrious Revolution," Cambridge Books, Cambridge University Press, number 9780521895026, November.
    55. Malanima, Paolo, 2011. "The long decline of a leading economy: GDP in central and northern Italy, 1300–1913," European Review of Economic History, Cambridge University Press, vol. 15(2), pages 169-219, August.
    56. van Zanden, Jan Luiten & van Leeuwen, Bas, 2012. "Persistent but not consistent: The growth of national income in Holland 1347–1807," Explorations in Economic History, Elsevier, vol. 49(2), pages 119-130.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Kumon, Yuzuru & Sakai, Kazuho, 2022. "Women's Wages and Empowerment : Pre-industrial Japan, 1600-1890," CEI Working Paper Series 2022-05, Center for Economic Institutions, Institute of Economic Research, Hitotsubashi University.
    2. Kumon, Yuzuru & Sakai, Kazuho, 2022. "Women’s Wages and Empowerment: Pre-industrial Japan, 1600-1890," Discussion Paper Series in Economics 18/2022, Norwegian School of Economics, Department of Economics.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Yuzuru Kumon, 2022. "Rich Europe, poor Asia: How wealth inequality, demography, and crop risks explain the poverty of pre‐industrial East Asia, 1300–1800," Australian Economic History Review, Economic History Society of Australia and New Zealand, vol. 62(2), pages 161-168, July.
    2. Ms. Valerie Cerra & Mr. Ruy Lama & Norman Loayza, 2021. "Links Between Growth, Inequality, and Poverty: A Survey," IMF Working Papers 2021/068, International Monetary Fund.
    3. Mikulas Luptacik & Bernhard Mahlberg, 2018. "Revisiting the Efficiency-Equity Trade-off: A Muli-objective Linear Problem combined with an extended Leontief Input Output Model," Department of Economic Policy Working Paper Series 016, Department of Economic Policy, Faculty of National Economy, University of Economics in Bratislava.
    4. Andrew Berg & Jonathan D. Ostry & Charalambos G. Tsangarides & Yorbol Yakhshilikov, 2018. "Redistribution, inequality, and growth: new evidence," Journal of Economic Growth, Springer, vol. 23(3), pages 259-305, September.
    5. Gründler, Klaus & Scheuermeyer, Philipp, 2018. "Growth effects of inequality and redistribution: What are the transmission channels?," Journal of Macroeconomics, Elsevier, vol. 55(C), pages 293-313.
    6. Oded, Galor, 2011. "Inequality, Human Capital Formation, and the Process of Development," Handbook of the Economics of Education, in: Erik Hanushek & Stephen Machin & Ludger Woessmann (ed.), Handbook of the Economics of Education, edition 1, volume 4, chapter 0, pages 441-493, Elsevier.
    7. Broadberry, Stephen & Ghosal, Sayantan & Proto, Eugenio, 2017. "Anonymity, efficiency wages and technological progress," Journal of Development Economics, Elsevier, vol. 127(C), pages 379-394.
    8. Bogang Jun & Tai-Yoo Kim, 2017. "Non-financial hurdles for human capital accumulation: landownership in Korea under Japanese rule," Cliometrica, Springer;Cliometric Society (Association Francaise de Cliométrie), vol. 11(1), pages 63-92, January.
    9. Philip T. Hoffman, 2020. "The Great Divergence: Why Britain Industrialised First," Australian Economic History Review, Economic History Society of Australia and New Zealand, vol. 60(2), pages 126-147, July.
    10. Fochesato, Mattia, 2018. "Origins of Europe’s north-south divide: Population changes, real wages and the ‘little divergence’ in early modern Europe," Explorations in Economic History, Elsevier, vol. 70(C), pages 91-131.
    11. Rota, Mauro & Spinesi, Luca, 2024. "Economic growth before the Industrial Revolution: Rural production and guilds in the European Little Divergence," Economic Modelling, Elsevier, vol. 130(C).
    12. Shinhye Chang & Rangan Gupta & Stephen M. Miller, 2018. "Causality Between Per Capita Real GDP and Income Inequality in the U.S.: Evidence from a Wavelet Analysis," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 135(1), pages 269-289, January.
    13. Jane Humphries & Jacob Weisdorf, 2019. "Unreal Wages? Real Income and Economic Growth in England, 1260–1850," The Economic Journal, Royal Economic Society, vol. 129(623), pages 2867-2887.
    14. Oded Galor & Omer Moav & Dietrich Vollrath, 2009. "Inequality in Landownership, the Emergence of Human-Capital Promoting Institutions, and the Great Divergence," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 76(1), pages 143-179.
    15. Kumon, Yuzuru, 2021. "The Deep Roots of Inequality," IAST Working Papers 21-125, Institute for Advanced Study in Toulouse (IAST).
    16. Andros Kourtellos & Charalambos G. Tsangarides, 2022. "Robust Correlates of Growth Spells: Do Inequality and Redistribution Matter?," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 84(6), pages 1302-1328, December.
    17. Daniel Halter & Manuel Oechslin & Josef Zweimüller, 2014. "Inequality and growth: the neglected time dimension," Journal of Economic Growth, Springer, vol. 19(1), pages 81-104, March.
    18. Veselov, D. & Yarkin, A., 2016. "Wealth Distribution and Political Conflict in the Model of Transition from Stagnation to Growth," Journal of the New Economic Association, New Economic Association, vol. 32(4), pages 30-60.
    19. Ho, Chi Pui, 2016. "Industrious Selection: Explaining Five Revolutions and Two Divergences in Eurasian Economic History within a Unified Growth Framework," MPRA Paper 73862, University Library of Munich, Germany.
    20. Ulrich Schetter & Adrian Jäggi & Maik T. Schneider, 2021. "Inequality, Openness, and Growth through Creative Destruction," CID Working Papers 130a, Center for International Development at Harvard University.

    More about this item

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:tse:iastwp:126841. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: the person in charge (email available below). General contact details of provider: https://edirc.repec.org/data/iasttfr.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.