Discussion Papers 2025

CIRJE-F-1246	"Life Insurance, Natural Disasters, and Human Capital Investment: A Case of Early 20th Century Japan"
Author Name	Okazaki, Tetsuji, Toshihiro Okubo, and Eric Strobl
Date	March 2025
Full Paper	PDF file
Remarks

Abstract
This paper examines the role of life insurance buffering negative income shocks on schooling. We focus on middle school grade promotion rates under earthquake disasters in early 20th century Japan. We constructed a dataset on grade promotions by gender, life insurance claims, and information on the deadliness of earthquakes, at the prefecture-level. The results of mediation analyses indicate that life insurance significantly buffered the negative impact of earthquakes on the promotion of boys to higher grades, while for girls the buffering effect of life insurance was mostly small and insignificant, which is consistent with the theoretical prediction.
Keywords: Life insurance, Education, Human Capital, Natural disaster, Japan

Abstract

This paper examines the role of life insurance buffering negative income shocks on schooling. We focus on middle school grade promotion rates under earthquake disasters in early 20th century Japan. We constructed a dataset on grade promotions by gender, life insurance claims, and information on the deadliness of earthquakes, at the prefecture-level. The results of mediation analyses indicate that life insurance significantly buffered the negative impact of earthquakes on the promotion of boys to higher grades, while for girls the buffering effect of life insurance was mostly small and insignificant, which is consistent with the theoretical prediction.

Keywords: Life insurance, Education, Human Capital, Natural disaster, Japan