Post‐Malthusian Dynamics in Pre‐Industrial Scandinavia

Theories of economic growth hypothesize that the transition from pre‐industrial stagnation to sustained growth is associated with a post‐Malthusian phase in which technological progress raises income and spurs population growth while offsetting diminishing returns to labor. Evidence suggests that England was characterized by post‐Malthusian dynamics preceding the Industrial Revolution. However, given England's special position as the forerunner of the Industrial Revolution, it is unclear if a transitory post‐Malthusian period is a general phenomenon. Using data from Denmark, Norway, and Sweden, this research provides evidence for the existence of a post‐Malthusian phase in the transition from stagnation to growth in Scandinavia.     

From Malthus to Modern Growth: Can Epidemics Explain the Three Regimes?*

We model demographic and economic long‐run development in a setting where mortality is endogenous and subject to epidemic shocks. The model replicates the full transition from Malthusian stagnation to modern growth. Consistent with the historical facts, the economy also passes an intermediate post‐Malthusian phase where growth rates of both population and per capita income increase simultaneously, as mortality rates fall and become less volatile. The escape from the Malthusian trap is the result of a series of mild epidemic shocks, making it inevitable at some stage, but its timing random. Calibrations show that it can differ by thousands of generations, absent differences in exogenous parameters.     

Evolution and growth

This paper presents an evolutionary growth theory that captures the interplay between the evolution of mankind and economic growth since the emergence of the human species. This unified theory encompasses the observed evolution of population, technology and income per capita in the long transition from an epoch of Malthusian stagnation to sustained economic growth.     

HEALTH IMPROVEMENTS AND THE TRANSITION OUT OF MALTHUSIAN STAGNATION

The central component of most economic models that analyse the transition from the Malthusian regime to self-sustaining developed economies is education. Improved health is normally envisaged as simply a by-product of economic growth. Whereas growth does, indeed, tend to improve health status, the reverse is also true, namely that health improvements are a dynamic force capable of driving economic expansion. This paper underlines the importance of health improvements in escaping from Malthusian stagnation. Further, and in contrast to existing literature, which emphasizes the effects of changes in mortality rates, this paper focuses on the relationship between health status and the efficiency of human capital technology. Through this channel, health improvements stimulate investments in child quality in terms of both nourishing and schooling and drive the economy towards the Modern Growth regime.     

The trade-off between fertility and education: evidence from before the demographic transition

The trade-off between child quantity and quality is a crucial ingredient of unified growth models that explain the transition from Malthusian stagnation to modern growth. We present first evidence that such a trade-off indeed existed already in the nineteenth century, exploiting a unique census-based dataset of 334 Prussian counties in 1849. Furthermore, we find that causation between fertility and education runs both ways, based on separate instrumental-variable models that instrument fertility by sex ratios and education by landownership inequality and distance to Wittenberg. Education in 1849 also predicts the fertility transition in 1880–1905.     

The Galor–Weil model revisited: A quantitative exercise

The long-run growth model of Galor and Weil [Galor, O., Weil, D., 2000. Population, technology, and growth: From Malthusian stagnation to the demographic transition and beyond. American Economic Review 90, 806–829] is examined quantitatively. We first give parametric forms to some functions which were only given on general form in the original article. We then choose numerical parameter values in line with calibrations of related long-run growth models, and with data. Finally, we simulate the model. We find, inter alia, that the time paths for population, and other variables, display oscillatory behavior: they move in endogenous cycles. As the economy transits from Malthusian stagnation to modern growth these oscillations die out. This is consistent with population growth rates fluctuating considerably in historical data, but having stabilized in modern economies. We also show that these cycles are not an artifact of the two-period life setting: allowing adults to live on after the second period of life with some probability does not make the oscillations go away. Rather, the cycles are driven by fertility being proportional to per capita income minus the parental subsistence requirement. When population is large, and per capita incomes close to subsistence, fertility is therefore sensitive to changes in population levels.     

Malthus in cointegration space: evidence of a post-Malthusian pre-industrial England

This paper re-examines the interaction between population growth and income per capita in pre-industrial England. Our results suggest that, as early as two centuries preceding the Industrial Revolution, England had already escaped the Malthusian Epoch and entered a post-Malthusian regime, where income per capita continued to spur population growth but was no longer stagnant. Our formulation of a post-Malthusian hypothesis implies cointegration between vital rates (birth- and death rates) and income and builds explicitly on a simple model of Malthusian stagnation. We show that this hypothesis can be interpreted as an extension of the latter model where the negative Malthusian feedback effect from population on income, as implied by diminishing returns to labor, is offset by a positive Boserupian and/or Smithian scale effect of population on technology.     

Agricultural Productivity Growth and Escape from the Malthusian Trap

Industrialization allowed the industrialized world of today to escape from the Malthusian regime characterized by low economic and population growth and to enter the post-Malthusian regime of high economic and population growth. To explain the transition between these regimes, we construct a growth model with two consumption goods (an agricultural and a manufacturing good), endogenous fertility, and endogenous technological progress in the manufacturing sector. We show that with an exogenous increase in the growth of agricultural productivity our model is able to replicate stylized facts of the British industrial revolution. The paper concludes by illustrating that our proposed model framework can be extended to include the demographic transition, i.e., a regime in which economic growth is associated with falling fertility.     

Four centuries of British economic growth: the roles of technology and population

Using long historical data for Britain over the period 1620–2006, this paper seeks to explain the importance of innovative activity, population growth and other factors in inducing the transition from the Malthusian trap to the post-Malthusian growth regime. Furthermore, the paper tests the ability of two competing second-generation endogenous growth models to account for the British growth experience. The results suggest that innovative activity was an important force in shaping the Industrial Revolution and that the British growth experience is consistent with Schumpeterian growth theory.     

Economic growth, labor market and demographic patterns

This study addresses the dynamic interaction between income growth, patterns of demographic variables, and characteristics of the labor market. We attempt to provide an endogenous explanation for the origin and nature of long-run sustained oscillations in the population and in economic variables. First, we develop an economic growth model containing unemployment. The resulting dynamics reveal that the emergence of irregular sustained oscillations is related to the lack of sensitivity in wage growth to changes in the employment rate. Next, labor force growth is endogenized in the basic model through micro-founded fertility choices of individuals. By introducing the endogenous fertility rate into the basic model, we generate a demographic transition. Next, consistent with Malthusian cycle literature, the inevitable time lag between individual reproductive decisions and subsequent market needs, in conjunction with a highly specialized labor force, appear to be the primary source of such long-run oscillations. Finally, the model predicts that raising the age of entry into the labor force increases economic growth.     

Population,food, and knowledge: a simple unified growth theory

This paper provides a unified growth theory, i.e. a model that explains the very long-run economic and demographic development path of industrialized economies, stretching from the pre-industrial era to the present-day and beyond. Making strict use of Malthus’ (An essay on the principle of population. London, printed for J. Johnson, 1798) so-called preventive check hypothesis—that fertility rates vary inversely with the price of food—the current study offers a new and straightforward explanation for the demographic transition and the break with the Malthusian era. Employing a two-sector framework with agriculture and industry, we demonstrate how fertility responds differently to productivity and income growth, depending on whether it emerges in agriculture or industry. Agricultural productivity and income growth makes food goods, and therefore children, relatively less expensive. Industrial productivity and income growth, on the other hand, makes food goods, and therefore children, relatively more expensive. The present framework lends support to existing unified growth theories and is well in tune with historical evidence about structural transformation.      

Viewpoint: Sustainability: Malthus revisited?

Abstract.  The sustainability debate concerns whether the world will experience stable or improving living standards for the foreseeable future, or whether the current trajectory will overtax the natural environment, leading to a 'crash' in living standards. This paper selectively reviews relevant research, focusing on both ecological concerns and technological progress, and asks whether sustainability would be problematic without rapid population growth. I suggest that continued demographic transition to lower fertility is the primary requirement for achieving sustainable development. This is, effectively, a modern translation of Malthus (1798) . The paper also discusses the role of the Malthusian cycle in human evolution.     

Why England? Demographic factors, structural change and physical capital accumulation during the Industrial Revolution

Why did England industrialize first? And why was Europe ahead of the rest of the world? Unified growth theory in the tradition of Galor and Weil (2000, American Economic Review, 89, 806–828) and Galor and Moav (2002, Quartely Journal of Economics, 177(4), 1133–1191) captures the key features of the transition from stagnation to growth over time. Yet we know remarkably little about why industrialization occurred much earlier in some parts of the world than in others. To answer this question, we present a probabilistic two-sector model where the initial escape from Malthusian constraints depends on the demographic regime, capital deepening and the use of more differentiated capital equipment. Weather-induced shocks to agricultural productivity cause changes in prices and quantities, and affect wages. In a standard model with capital externalities, these fluctuations interact with the demographic regime and affect the speed of growth. Our model is calibrated to match the main characteristics of the English economy in 1700 and the observed transition until 1850. We capture one of the key features of the British Industrial Revolution emphasized by economic historians — slow growth of output and productivity. Fertility limitation is responsible for higher per capita incomes, and these in turn increase industrialization probabilities. The paper also explores the availability of nutrition for poorer segments of society. We examine the influence of redistributive institutions such as the Old Poor Law, and find they were not decisive in fostering industrialization. Simulations using parameter values for other countries show that Britain’s early escape was only partly due to chance. France could have moved out of agriculture and into manufacturing faster than Britain, but the probability was less than 25%. Contrary to recent claims in the literature, 18th century China had only a minimal chance to escape from Malthusian constraints.     

Does the Mortality Decline Promote Economic Growth?

This paper analyzes qualitatively and quantitatively the effects of declining mortality rates on fertility, education and economic growth. The analysis demonstrates that if individuals are prudent in the face of uncertainty about child survival, a decline in an exogenous mortality rate reduces precautionary demand for children and increases parental investment in each child. Once mortality is endogenized, population growth becomes a hump-shaped function of income per capita. At low levels of income population growth rises as income per capita rises leading to a Malthusian steady-state equilibrium, whereas at high levels of income population growth declines leading to a sustained growth steady-state equilibrium.     

Takeoffs

This paper identifies factors associated with takeoff—a sustained period of high growth following a period of stagnation. Countries that experience takeoffs average 2.3% annual growth following their stagnation episodes, while those that do not average 0%. Using probit, we find that de jure trade openness is positively and significantly associated with takeoffs. A one‐standard‐deviation increase in de jure trade openness is associated with a 55% increase in the probability of a takeoff in our default specification. Capital account openness encourages takeoff responses, but measures of de facto trade openness are found to be poor predictors of takeoffs. We also examine the determinants of nations achieving “sustained” takeoffs; i.e. those lasting eight years or longer. Takeoffs in countries with more commodity‐intensive output bundles are less likely to be sustained, suggesting that adverse terms‐of‐trade shocks may play a role in ending long‐term high growth episodes.     

On the Persistence of Labour Market Insecurity and Slow Growth in the US: Reckoning with the Waltonist Growth Regime

In this article I systematically incorporate empirical work on rising income inequality and wage stagnation into a regulation theoretic framework for analysing macroeconomic growth. The rise of job polarisation and income inequality coincides with a long period of macroeconomic stagnation, both continuing through to the present (with the exception of a brief period of strong growth and declining inequality in the second half of the 1990s). The corporate scramble to restore profit rates after the crisis of Fordism has transformed the institutional configuration of the political economy. In particular, institutions supporting upward mobility and middle-class incomes in the economy have been eroded by the twin forces of internationalisation (leading to the re-emergence of wage-based competition) and employment externalisation (outsourcing, downsizing, antiunionism, etc). The current growth regime, which may be characterised as Waltonist, based on the Wal-Mart model of buyer-driven global supply chains focused on cutthroat wage-based competition and deunionisation, is not transitional but rather embedded in apparently long-term institutional settlements that amount to a dysfunctional regime.     

Accounting for Fertility Decline During the Transition to Growth

In every developed country, the economic transition from pre-industrial stagnation to modern growth was accompanied by a demographic transition from high to low fertility. Even though the overall pattern is repeated, there are large cross-country variations in the timing and speed of the demographic transition. What accounts for falling fertility during the transition to growth? To answer this question, this paper develops a unified growth model that delivers a transition from stagnation to growth, accompanied by declining fertility. The model is used to determine whether government policies that affect the opportunity cost of education can account for cross-country variations in fertility decline. Among the policies considered, education subsidies are found to have only minor effects, while accounting for child labor regulation is crucial. Apart from influencing fertility, the policies also determine the evolution of the income distribution in the course of development.     

UNDERSTANDING PER‐CAPITA INCOME GROWTH IN PREINDUSTRIAL EUROPE

In a Malthusian environment, per‐capita incomes are stagnant, meaning they cannot exhibit sustained growth. However, they can still display volatility and persistence when hit by shocks. This article simulates a Malthusian model with realistic life‐cycle structure and stochastic and accelerating growth in land productivity. We find that differences across simulated economies are quantitatively similar to those found in recently compiled data over GDP per capita for several European countries before 1800. This speaks to the relevance of the Malthusian model for understanding preindustrial development in Europe, contrasting with contentions to the contrary in some of the existing literature.     

Renewable resources,property-rights regimes and endogenous growth

We extend Brander and Taylor's [Brander, J.A., Taylor, M.S., 1998. The simple economics of Easter Island: a Ricardo-Malthus model of renewable resource use. Am. Econ. Rev. 88, 119–138.] model of feast and famine cycles on Easter Island using Galor and Weil's [Gailor, O., Weil, D.N., 2000. Population, technology and growth: from Malthusian stagnation to the demographic transition and beyond, Am. Econ. Rev. 90, 806–28] model of endogenous technological advance, where technological change is related to the population. We note that different property-rights regimes will influence the relative direction of technological advance—whether that advance is in harvesting technologies or in technologies that influence the growth rate of some renewable biological resource. Property-rights regimes that favor biological growth rates over harvest rates tend to dampen feast–famine cycles, while those that favor harvest efficiency worsen such cycles.     

Life expectancy and economic development: Evidence from microdata

This study examines the effect of life expectancy on fertility, education, and labor force participation. Using birth and sibling histories from the Demographic Health Surveys conducted in sub‐Saharan Africa, I construct a time series of age‐specific birth rates and mortality rates at the country‐region level. I use these data to test the implications of a general equilibrium model linking life expectancy to fertility, human capital, and labor supply. My results suggest that increases in life expectancy reduce fertility, increase education, and increase labor force participation. Overall, my empirical results suggest that in sub‐Saharan Africa, increases in life expectancy will have a positive impact on growth through fertility, education, and labor supply but that the effect will be small. My results also rule out the possibility that recent shocks to adult mortality in high HIV prevalence countries will reduce fertility, increase labor productivity, and lead to faster growth.