Consumption Smoothing in the Working-Class Households of Interwar Japan
In: The journal of economic history, Band 84, Heft 1, S. 111-148
ISSN: 1471-6372
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.