Shizuka Inoue

I study how the scarcity of workers with managerial experience limits firm size and economic development, combining evidence from a natural experiment with a quantitative model. After World War II, three million Japanese civilians, many of them with managerial experience, were forced to return to Japan. I use repatriates' historical family ties to Japanese districts to isolate exogenous variation in local inflows of workers with managerial experience. The inflow shifted employment from self-employment toward wage work and from agriculture toward manufacturing and services. Firms grew larger, expanded beyond their headquarters cities, and participated more in overseas programs teaching modern U.S. management practices. I develop a spatial model in which managerial experience expands the pool of workers qualified for management. Managers supervise production within establishments and implement practices that raise productivity across the firm's establishment network. Removing the managerial experience of these repatriates lowers aggregate output per worker by 4 percent. Firms' geographic expansion accounts for about a quarter of this effect, amplifying the aggregate impact from managerial experience.

Opinion is sharply divided about whether the bombing of an enemy's civilian targets and the killing of their combatants result in an adversary's population becoming pacifist or pro-military. Identification is difficult because natural experiments are rare, and effects may be heterogeneous. For example, killing enemy combatants may create martyrs, while targeting civilians may lower their pro-war morale. We solve this problem by leveraging a natural experiment in Japan in which military casualties and urban destruction varied exogenously, but differentially, across cities. We then estimate the impact of devastation and slaughter on support for Japan's Liberal Democratic Party, which aims to revise Japan's constitution to enable it to rearm. We find contrasting effects of targeting soldiers and civilians—military deaths induce future pro-military voting, while urban destruction induces pacifist voting. Moreover, these effects persist long after most people with direct experience of the war have died.