Title: Consumption smoothing in the working-class households of interwar Japan,
Abstract: I analyze Osaka factory worker households in the early 1920s, whether
idiosyncratic income shocks were shared efficiently, and which consumption
categories were robust to shocks. While the null hypothesis of full
risk-sharing of total expenditures was rejected, factory workers maintained
their households, in that they paid for essential expenditures (rent,
utilities, and commutation) during economic hardship. Additionally, children's
education expenditures were possibly robust to idiosyncratic income shocks. The
results suggest that temporary income is statistically significantly increased
if disposable income drops due to idiosyncratic shocks. Historical documents
suggest microfinancial lending and saving institutions helped mitigate
risk-based vulnerabilities.