While cultural rules are important in determining the structure and si
ze of households in populations, economic and demographic constraints
are of equal, if not of greater, importance in determining household c
haracteristics. This paper argues that the demand for labor having cer
tain characteristics (related to skilling, monitoring costs, and the c
apacity to signal trainability to prospective employers) has played an
important role in shaping household structure and size in prewar Japa
n both through its indirect impact upon the vital rates and through it
s direct impact on who stays in the household and who goes out on a te
mporary and/or permanent basis. The diffusion of rice cultivation agri
culture and by-employments during the Tokugawa period changed the dema
nd for farm household labor and led to a regime of moderate sized stem
family households. Analysis of a data set with economic and demograph
ic data for approximately 1,000 towns and villages circa 1930 bears ou
t the importance of the demand for labor in conditioning household siz
e and structure in prewar Japan.