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Non-financial hurdles for human capital accumulation: landownership in Korea under Japanese rule

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Abstract

This study examined the relationship between land inequality and human capital accumulation in the Korean colonial period by using a panel data set from 1934 to 1942. Evidence of the adverse relationship between land inequality and the accumulation of human capital has thus far only been presented by using data from Western countries and from countries that achieved industrialization not under colonial occupation but by their own economic interest. The presented findings thus contribute to the body of knowledge on this topic and confirm the generalizability of the Galor model by analyzing the unique Korean context under Japanese rule in the early twentieth century. It is the first study to present evidence that inequality in landownership had an adverse effect on the level of public education in the Korean colonial period (i.e., it is a non-financial hurdle for human capital accumulation). By using a fixed effects model and a fixed effects two-stage least squares model with an instrumental variable estimation, this study exploits variation in inequality in land concentration across regions in Korea, accounting for the unobserved heterogeneity across these regions. Overall, this analysis establishes a highly significant adverse effect of land inequality on education in the Korean colonial period.

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Notes

  1. This study measures the level of urbanization using the number of workers in commerce and transportation relative to the total population, while Cinnirella and Hornung (2011) used the proxy of the share of the population living in urban centers. This distinction occurs because the process of urbanization in Korea differs from those in Western countries. According to Horvath (1969), “the colonial city model” has distinctive features compared to his other two city models, “the industrial city model” and “the pre-industrial model.” After the opening of the ports in 1876 and the Japanese occupation, the Japanese colonial government reorganized Korean cities to make them the bases of colonial exploitation. In this situation, commercial activity, especially in relation to rice, was main activity that helped the cities grow. For example, the city of Koonsan underwent planned development under Japanese colonial rule. Koonsan is located close to the plains, and thus, it was easy to collect rice for export to Japan, and it also served as the perfect commercial base for selling goods manufactured in Japan to Jeollanam-do and Chungcheongnam-do. The construction of railway connections to the colonial cities further boosted their development (Cho 2000). For these reasons, it is more relevant to capture the level of urbanization of each region using the share of workers in commerce and transportation.

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Acknowledgments

We are grateful to Oded Galor for his valuable comments. Comments from Francesco Cinnirella, Helene Latzer, Jeong-Dong Lee, Hayoung Park, Jongsu Lee, attendees of my presentation at Brown University, and two anonymous referees are also gratefully acknowledged. This work was supported by the National Research Foundation of Korea (NRF) Grant Funded by the Korea government (MEST) (No. 2010-0026178).

Data source

Government-General in Korea (1908–1943) the Annual Statistical Report of the Government-General.

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  1. Economics Institute, University of Hohenheim, 70593, Stuttgart, Germany

    Bogang Jun

  2. Technology Management, Economics, and Policy Programs, Seoul National University, Building 37, Gwanak-gu, Seoul, 151746, South Korea

    Tai-Yoo Kim

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  1. Bogang Jun
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Correspondence to Bogang Jun.

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Jun, B., Kim, TY. Non-financial hurdles for human capital accumulation: landownership in Korea under Japanese rule. Cliometrica 11, 63–92 (2017). https://doi.org/10.1007/s11698-015-0138-x

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