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Abstract

I analyze the risk-coping strategies of factory-worker households in early twentieth-century Tokyo. I digitized a unique daily longitudinal household budget survey conducted in Tsukishima, a representative manufacturing area, to examine how consumption was affected by idiosyncratic shocks. I find that although the households were vulnerable and their consumption levels were impacted by these shocks, the estimated income elasticity of indispensable consumption was relatively low in the short run. The results of the mechanism analysis suggest that credit purchases from local retailers helped smooth short-run consumption, highlighting the role of informal credit institutions in mitigating vulnerability among urban worker households.