Governance of Trade in the Labor Market: Poaching, Courts, and Settlements in Early Twentieth-Century Japan

Abstract

Protection of claim transfer under the state court is an institutional basis of the modern market economy. In the labor market too, transportation cost or human capital investment could be willingly covered by the claimant under slavery or indenture. However, to facilitate better matching by free mobility, the modern judicial system does not allow a claim to an employee to be perfection as slavery or indenture. A device to balance claim protection and free mobility is private settlement indirectly governed by the state court. This paper focuses on this complementarity in the experience of the Japanese silk-reeling industry.