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Consumption Smoothing in the Working-Class Households of Interwar Japan

Published online by Cambridge University Press:  21 February 2024

Kota Ogasawara
Kota Ogasawara*
Affiliation:
Associate Professor, Tokyo Institute of Technology - Department of Industrial Engineering and Economics, 2-12-1, Ookayama, Meguro-ku, Tokyo 152-8550, Japan.
*
E-mail: [email protected].
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Abstract

I analyze factory worker households in the early 1920s in Osaka to examine idiosyncratic income shocks and consumption. Using the household-level monthly panel dataset, I find that while households could not fully cope with idiosyncratic income shocks at that time, they mitigated fluctuations in indispensable consumption during economic hardship. In terms of risk-coping mechanisms, I find suggestive evidence that savings institutions helped mitigate vulnerabilities and that both using borrowing institutions and adjusting labor supply served as risk-coping strategies among households with less savings.

Type
Article
Information
The Journal of Economic History , Volume 84 , Issue 1 , March 2024 , pp. 111 - 148
Copyright
© The Author(s), 2024. Published by Cambridge University Press on behalf of the Economic History Association

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Footnotes

I wish to thank Dan Bogart, Bishnupriya Gupta, Peter Lindert, Kazushige Matsuda, Stefan Öberg, Tetsuji Okazaki, Sakari Saaritsa, Eric Schneider, Masayuki Tanimoto, Ken Yamada, Elise van Nederveen Meerkerk, Hans-Joachim Voth, and the four anonymous referees. I would also like to thank the seminar participants at the University of Tokyo; Montréal; Massachusetts Institute of Technology; and Paris School of Economics for their helpful comments. I thank Ryo Nagaya for research assistance. There are no conflicts of interest to declare.

References

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