From Manchuria to post-war Japan: knowledge transfer through in-house training at the South Manchuria Railway Company (SMR)

One important question in history is how knowledge has spread and allowed participants in an economy to increase their human capital. As Easterly and Levine have suggested (2001), one possible source of Japan’s post-war growth was the increased size of the labour force and improved human capital. Their data show that Japan’s experience was different from that of post-war Europe, where sources of growth mainly came from the high levels of investment, rather than from human resources. My research goes back to imperial Japan to analyse one possible channel of human capital development – the in-house vocational training offered by the largest Japanese wartime public corporation, the South Manchuria Railway Company (SMR). The majority of the 140,000 Japanese staff members were higher-elementary school graduates. They worked as staff members engaged in railway operation and construction, station duties, or worked as factory workers, and received extensive on-the-job training. A limited number of capable young employees were invited to attend training schools within the company. These programs were also open to non-Japanese staff members, but most participants were Japanese. Corporate training became increasingly common after the Second Sino-Japanese War broke out in 1937 to fill the vacancies created as a result of the intensified conscription. Although some people died in the war, many returned to Japan and entered the post-war labour market armed with their wartime skills and knowledge. The paper argues that training opportunities provided to under-educated young Japanese individuals at the SMR and other public corporations in the overseas empire produced unanticipated benefits in the form of human capital development.