Elite Persistence in Family: The Role of Adoption in Prewar Japan

Does selecting heirs from outside the family’s consanguineous relationships help maintain elite status? In prewar Japan, inheritance law prioritized the eldest son for inheriting all property and businesses. In the absence of a biological son, families were permitted to adopt a son as an alternative means to secure an heir. Using this historical framework, this paper examines the differences in the intergenerational transmission of elite status between families that select adoptive sons and biological sons as heirs. The preference for adoptive heirs may lead to positive and negative selection in the decision-making process, potentially biasing our OLS results. To address these selection bias issues, we use the gender of the firstborn child as an instrument for the adoption decision. Our empirical findings indicate that families with adoptive heirs are 20.6% more likely to maintain elite status than those with biological heirs. Furthermore, we show that our empirical results are driven by matching high-quality adopted sons with fathers who were highly successful in their early lives.