RDX : 好文 雖然我覺得最后關于Honor Code的論斷有點弱 有沒有懂行的指教一下？
I. Introduction
The Japanese miracle, which lifted the Japanese economy from the ashes of the World War II destruction to the present-day prosperity, and the “lost decade” of the 1990s, during which the economy ceased to grow, are well known. Much less so is the decades-long relative stagnation (relative to the postwar boom) before World War II: for much of the prewar period of 1885–1940, Japan's real GNP per worker remained a third of that of the United States. This paper addresses the question of why the Japanese miracle did not occur before the war.
An amazing fact about agricultural employment in prewar Japan is that it was virtually constant at 14 million persons (about 64 percent of total employment in 1885) throughout the entire prewar period, despite a very large urban-rural income disparity. There was a persistent and significant rural-to-urban emigration, but its size was never large enough to diminish rural population. The constancy strongly suggests that there was a powerful noneconomic force that prevented people from moving out of agriculture.
This leads us to ask whether a possible sectoral misallocation of labor due to this barrier to labor mobility had a quantitatively important effect on the economic development of prewar Japan. We do so by superimposing the labor barrier on a two-sector neoclassical growth model with agriculture. The two-sector model itself builds on the long tradition of modeling the “dual economy” starting with Jorgenson (1961).1 Its most recent renditions are Echevarria (1997), Robertson (1999), Laitner (2000), Gollin, Parente, and Rogerson (2002), Hansen and Prescott (2002), and many others. They examine, as we do in the paper, the dynamics of capital accumulation when the country starts to devote more resources outside the decreasing-returns-to-scale technology that is agriculture. They do not consider possible effects of sectoral distortion on the transition, however.
For its concern on the sectoral distortion, our paper is related to the recent development accounting literature on international income differences, although our focus is exclusively on Japan in relation to the United States.2 Vollrath (forthcoming) finds for a number of countries that the sectoral allocation of labor and capital is inefficient because their marginal products are not equated across sectors. He finds that the factor market inefficiency accounts for 90–100 percent of international differences in the overall (economywide) total factor productivity (TFP). Restuccia, Yang, and Zhu (2008) show that sectoral distortions in the use of intermediate inputs and labor generate large international differences in the overall TFP. Our paper is similar to these papers in that we find a large effect on the overall TFP of a sectoral distortion (due, in our case, to the labor barrier) for prewar Japan. Unlike these papers, however, our analysis is dynamic in that we also examine the effect of the distortion on capital accumulation.
We show that our simple two-sector growth model, when the labor barrier is superimposed on it, can account for the relative stagnation of prewar Japan. We then lift the labor barrier to predict what would have happened to the prewar Japanese economy. This counterfactual simulation shows that prewar GNP per worker would have been higher by about 32 percent, which would have placed Japan at close to a half, not a third, of the United States in terms of per-worker output. The output gain comes about because an increased overall production efficiency achieved by the removal of the barrier would have sparked an investment boom. The gain from about a third to a half of the U.S. GNP, however, is only a part, albeit a significant part, of the catch-up that took place in the postwar period when the labor barrier crumbled down. To fully account for the catch-up, we need to incorporate the rapid postwar TFP growth in manufacturing.
We then argue that this hugely costly labor barrier was self-imposed by the extended family. That is, the barrier was in place not because of some legal restriction limiting the extent of emigration, which did not exist in prewar Japan, but because the parent who is a farmer wished one of the children to succeed his occupation. Other than describing the prewar social norm to value family lineage, we do not attempt to derive the assumed paternalistic preferences from some meta theory à la Akerlof (1980). Unlike the nonpaternalistic preferences standard in economics, such a paternalistic preference requiring the child to take actions against his own economic interests is not self-enforcing. We point to paternalistic clauses in the Civil Code and other institutional features of prewar Japan that made it possible for the parent to overcome the enforcement problem. Our hypothesis explains why the number of farm households remained constant with a constant family size (which accounts for the constant agricultural employment) before the war and why agricultural employment dropped drastically after the war when there was a wholesale revision of the Civil Code.
Having stated our thesis, we acknowledge an alternative view about the income disparity between agriculture and industry. Caselli and Coleman (2001) view the disparity as a skill premium, not a sign of distortion. They show, using a two-sector model, that the convergence of agricultural income to nonagricultural income observed for the United States over a century since 1880 can be explained by an increased occupational mobility brought about by a decline in the cost of acquiring skills. In their model, individuals are heterogeneous with respect to the amount of time required to obtain a ticket to get out of agriculture. So there is always a measure of marginal individuals who are indifferent between staying in agriculture and paying the one-time cost in time to move out. In this view of the world, the counterfactual simulation amounts to asking what would have happened if the training cost were as low as it is now. We would claim that this training cost model is less suited to prewar Japan than ours. First, to the extent that the time cost of training is highly correlated between siblings, it is hard to explain why in each family one of the siblings remained in agriculture and all others left. Second, to explain the timing of the postwar exodus out of agriculture, the model would have to assume that there was a mass of individuals in the cross-section distribution of the training time and that the decline in the training cost crossed the threshold precisely when the observed exodus took place.
The plan of the paper is as follows. The next section, Section II, describes facts about Japan's economic development. Section III advances our sectoral misallocation hypothesis and summarizes our findings. This is followed by three sections of elaboration: a presentation of the two-sector growth model in Section IV, a calibration of the model in Section V, and a detailed discussion, in Section VI, of simulation results for both the pattern of sectoral allocation and the behavior of aggregate variables. The issue of why there existed the barrier in the first place will be taken up in Section VII. Section VIII briefly states conclusions and an agenda for future research.
中間省略 太多數學拷貝不過來
VII. Why Did the Barrier Exist?
In prewar Japan, in contrast to the Edo period preceding it, there was no restriction imposed by the state on the extent of interregional emigration. It is argued in this section that the labor barrier is self-imposed by the household head. Our hypothesis consists of two parts. First, we assume a paternalistic preference that the household head wants one of the children to succeed him as a full-time farmer. Given the large income disparity, the child has no incentive to honor the parent's wish. The second part of our hypothesis is that the institutions of prewar Japan including the Civil Code made it possible for the paternalistic preferences to prevail. We do not derive the assumed paternalistic preferences from some meta theory à la Akerlof (1980). Here, we simply describe the prewar social norm, centered around the notion called ie, that the assumed preferences are meant to capture.
A. The Cityward Movement of the Peasant
In prewar Japan, as already emphasized, agricultural employment was virtually constant at 14 million. Related facts about prewar Japan are the following.•
The number of farm households (households whose head's main occupation is farming) was constant at 5.5 million, and the population in those farm households was constant at 30 million, or about 5.5 persons per household throughout the prewar era (the source is LTES). Because there was virtually no migration from the city,24 the constancy of the number of farm households implies that the head of the farm household was almost always succeeded by one of his children upon his death or retirement.25
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All children except for the heir and his spouse left the village. This follows from the constancy of the number of farm households and the relatively small household size of 5.5.26
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Primogeniture was prevalent at least in rural areas. Inheritance was impartible, and the entire estate went to one of the sons (usually the eldest son), who also succeeded the father's occupation as a farmer.27
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There was a large rural-urban disparity in household income, as seen already in figure 10.
•
The steep postwar decline in agricultural employment after 1955 (see fig. 3) was initiated by young cohorts. In his perceptive essay, Namiki (1957) noticed that the decline was concentrated in the 14–19 age bracket. His speculation, which was proved correct by time, was that the youths defecting to the city include eldest sons, who in the prewar tradition are expected to succeed their fathers' occupation as farmer.
B. Why Did Agricultural Employment Remain Constant?
Given the large rural-urban income disparity in prewar Japan, we are not surprised that household members not designated as heirs left agriculture. The mystery is why the son designated as heir (and his wife) stayed in agriculture. An explicit calculation of farm and urban incomes relevant for the peasant contemplating on migration was given by Masui (1969). He notes that for a son and his prospective wife the comparison should be between farm labor income for both the son and his wife combined and urban labor income for the son only because the wife's employment opportunity in the city was severely limited in the prewar era. Furthermore, if the son is the heir, his farm income should also include imputed rent from the farm property he would eventually inherit. Masui's calculation for 1923–39 shows that the heir's farm income, with wife's labor income and imputed rent figured in and with an allowance for difference in rural and urban price levels, is less than urban income for 1928–37.
Besides the issue of why peasants did not leave the village during those depressed years, three questions can be raised about Masui's thesis. First, the heir could sell the inherited farmland and live in the city to obtain the higher urban income. However, to prevent this, the father could require the son to remain on the farm until he inherits the land. By the time his son inherits the estate, it may be too late for him to start a career in the city.28
Second, there may not have been much to inherit for the heir to a sharecropper. According to Momose (1990, 149), the right to cultivate had a property value between 10 percent and 30 percent of the value of land. Even if the cultivation right is transferable from father to son (which we do not know is the case), the property value may not have been large enough to make up for the rural-urban income disparity for tenant farmers. To the extent that it was not, it is difficult to explain on purely economic grounds why tenant farmers, constituting about 30–40 percent of all farm households,29 did not leave agriculture.
Third, as pointed out by Namiki (1957), the land reform instituted by SCAP (the Supreme Commander of the Allied Powers, namely Douglas MacArthur) in 1951, which transferred land ownership to tenant farmers, should have made it more attractive for previous tenant farmers to stay in agriculture in the postwar period. The postwar large-scale defection to the city took place despite the land reform.
Our hypothesis to explain the constancy of agricultural employment is an elaboration of Namiki's (1957) conjecture that the economic forces favoring migration to the city, which had been held in check by patriarchy in the prewar era, were let loose in the years following the defeat of Japan. To appreciate his logic, it is necessary to understand the nature of patriarchy that regulated the behavior of individuals in prewar Japan through the Civil Code. The distinguishing feature of the prewar Civil Code (as opposed to the new postwar Civil Code) is its recognition of the institution called the ie (sometimes translated “house”) and its headship. The ie is “a ‘stem family'—an organization that transcended its present members through history and spanned generations through the eldest son” (Ramseyer 1996, 82).30 Vogel (1967, 92–94) describes the ie in the context of the cityward migration mentioned above:
The ie is a patrilineal organization with rapid segmentation in each generation. One son, usually the first, inherits all the family property, including land, home, and ancestral treasures. Daughters enter their husband's ie upon marriage, and sons who do not succeed in their parents' ie can either be adopted as heirs in families with no sons or start relatively independent “branch” lineages of their own ie. … Because one son remained in the rural area and inherited the family property, the ie was maintained and remained the basic unit of rural organization. Sometimes it was the first son who migrated to the city, but in any case the head of the ie has remained remarkably powerful in deciding who would and would not go to the city.
As we mentioned already, those sons not designated as heirs to the headship left the village for a good economic reason, and it would also have been the head's wish anyway, since the size of the farmland the family owns (or the family has the right to cultivate) would not have been enough to support those “excess sons.”31 Why did the heir remain in the village, and how was he able to find a bride? The power of the head sanctioned by the prewar Civil Code explains it. According to Oda (1992, 232), under the code, “the head of the family had the power to designate the place where family members should live, to control their choice of marriage-partner and to expel them from the family when necessary.”32 Takeyoshi Kawashima, a prominent legal scholar in Japan, notes that the peasant life before the introduction of the Civil Code in 1898 did not quite honor the sort of patriarchy described in the code (Kawashima 1957, 8–9, 46). He then notes, however (p. 10 and chap. 1, particularly pp. 46–47), that the code, along with the indoctrination by the government (much like the sort practiced in North Korea today, we imagine) whereby every schoolchild was required to study a textbook (called Kyoiku Chokugo; see fig. 11, which is the front page of a textbook wide in use in 1890) expounding on obedience to the father and to the emperor, must have had a profound influence, particularly on the peasant population, as can be surmised, for example, from the decline of peasant rebellions since the end of the nineteenth century.33 The heir stayed in the village, and a daughter married into a farm household, because it was what father wished.
Fig. 11
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Fig. 11.— How children were indoctrinated
This hypothesis of the constancy of agricultural employment in prewar Japan also explains its steep postwar decline. A new Constitution was adopted in 1947, and there was a wholesale revision of the Civil Code under the direction of SCAP. Article 24 of the new Constitution states that “With regard to choice of spouse, property rights, inheritance, choice of domicile, … laws shall be enacted from the standpoint of individual dignity.” The new Civil Code no longer recognizes the ie and the dictatorial power of the head. School textbooks were rewritten to fully reflect those changes. It is not surprising at all, then, that the large-scale defection to the city since around 1955 was initiated by young cohorts, who were not subject to the prewar indoctrination of the supremacy of the ie over the individual. Reinforcing the tide to the city was the fact that the new Civil Code encourages equal division whereas the old code facilitated (but did not require) primogeniture. Now the eldest son who inherits the entire estate by the will of his father is obligated to pay the other siblings a minimum claim (half of what they would have received under the default mode of inheritance [i.e., equal division]), which certainly makes it less economically attractive for the eldest son to stay in the village.
C. Alternative Explanations?
It was suggested to us that the lack of mechanization in rice production in prewar Japan could explain the constancy. The introduction of the tractor started only after 1955, and mechanization of other tasks such as rice planting and rice reaping did not start until the mid-1960s in Japan. If the prewar agricultural technology was approximately the Leontief technology with limited substitutability between land area and labor, it would explain the constancy of agricultural employment. However, this explanation is inconsistent with the well-documented fact that the rural-urban income disparity was very large in prewar Japan. Furthermore, it is a long tradition of agricultural economics (see, e.g., Hayami 1975) to admit substantial substitutability between land, labor, and capital, as in the Cobb-Douglas production function.
Another possibility is that the barrier may have existed in the city, not in the countryside, in the form of inadequate urban housing and infrastructure. This, however, does not explain why the scale of the cityward emigration was such that the population left behind in the countryside remained constant. Virtually every nonheir child left for the city.34
VIII. Conclusion
According to the standard Lewisian theory of development, the supply curve of industrial labor is horizontal, and the cityward movement of the peasant is limited only by demand. We argued for prewar Japan that the rural-to-urban migration was limited by supply. Prewar Japan is certainly not the only case in history of a large and persistent rural-urban income disparity. Even today, the disparity can be observed for a large number of developing countries.35 Our model of a dual economy may be applicable to those countries as well. Their per capita income is low because they have their own version of the labor barrier.
The quantitative implications of our theory are big. Per-worker GNP of Japan in her heyday was about 82 percent of that of the United States in 1991 and about 36 percent during the prewar period of 1885–1940. According to our two-sector model, Japan's prewar GNP per worker would have been higher by 32 percent if the labor barrier were absent. In this sense, our dual economy model accounts for 12 ( ) percentage points, or about a quarter, of the U.S.-Japanese gap of 46 ( ) percentage points. This estimate, based on a closed-economy model, should be taken as a lower bound because in the counterfactual simulation the country is denied a chance to exploit the comparative advantage made possible by the release of labor from agriculture. We have argued that the rest of the gap is due mostly to the rapid postwar TFP growth outside agriculture.
A clear research agenda awaits. To endogenize hours worked, we could consider an overlapping-generations version of the model in which family members defecting to the city form households not altruistically linked to their parents. Such a model may help to explain the low prewar capital accumulation. Turning to substantive issues not fully addressed in the paper, we could use the model to analyze the postwar boom and assess the quantitative effect of the release of the pent-up potential kept back by the prewar barrier. Another important issue is the sectoral TFP. Japan's manufacturing TFP went up, once during the interwar period and another time during the postwar high-growth period. Exploring reasons why the rapid TFP growth took place when it did is obviously a major future research topic. Hints abound. Hayami and Ogasawara (1999) and Godo and Hayami (2002) argue that a threshold level of average educational level was reached in the interwar period so that foreign advanced technology could be profitably adopted. Braun, Okada, and Sudou (2005) find a close connection in the postwar period between U.S. R&D expenditure and Japanese TFP growth 3 years after. Gordon (2004) documents that the rapid technological catch-up occurred in postwar Europe as well. Another, perhaps more concrete, research topic is to explain why the interwar capital accumulation predicted by theory did not occur. We conjectured that the rapid cartelization in the 1930s must have had something to do with it.
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