Changes in Japanese industrial structure and urbanization: evidence from prefectural data

We empirically analyzed the relationship between the change in industrial structure and urbanization using post-WWII data from Japanese prefectures. This study used three concepts of industrial structure, standard industrialization (enhancing of the non-agricultural sector), service industrialization, and the industrial upgrading (enhancing specialized service industries). We also focused on the different patterns of migration in the process of urbanization: intra-prefectural and inter-prefectural migration. The main results of the regression analysis are (1) during the period of rapid economic growth in Japan, industrialization induced population inflow from other prefectures, and this effect promoted urbanization in those prefectures. (2) During the same period, prefectures with relatively high shares of manufacturing attracted many migrants from other prefectures, and this effect promoted the urbanization. (3) Entering the period of economic stagnation, in the prefectures where industrial upgrading is advanced, intra-prefectural migration was active, and urbanization was also advanced by this effect.