The stem family and labour markets: Reflections on households and firms in Japan's economic development

This paper examines a view that the traditional stem family system was one of the preconditions for Japan's modern economic development, focusing on labour markets and skill formation practices. The paper begins with a brief look at the Japanese stem family household formation rules. Then, exploration is made, first, on the self-employed, the largest sector of the early modern economy; second, the merchant house and its employment patterns as an origin of present day large corporations' employment system and skill formation and human capital management practices; and third, workshop industries, which formed middle and lower layers of the manufacturing sector in the period of industrialisation. Finally, women's marriage behaviour is examined in relation to labour markets, especially changes in real wages. All this is an attempt to go some way towards a better understanding of the ways in which the family economy and corporate firms worked in economic development, rather than to suggest an alternative hypothesis on the relationship between family and household factors and subsequent economic development.