Population Genetics and Economic Growth

This paper builds an age-structured model of human population genetics in which explicit individual choices drive the dynamics via sexual selection. In the model, agents are endowed with a high-dimensional genome that determines their cognitive and physical characteristics. Young adults optimally search for a marriage partner, work for firms, consume goods, save for old age and, if married, decide how many children to have. In accord with the fundamental genetic operators, children receive genes from their parents. An agent's human capital (productivity) is an aggregate of the received genetic endowment and environmental influences so that the population of agents and the economy co-evolve. After calibrating the model, we examine the impact of physical, social, and economic institutions on population growth and economic performance. We find that institutional factors significantly impact economic performance by affecting marriage, family size, and the intergenerational transmission of genes. The principal novel findings are that i) genetic diversity has a nonmonotone causal impact on population size and economic performance; ii) an endogenous population threshold exists which, absent frictions, causes societies with declining populations and output to reverse course and grow; and iii) that the emotion love substantially accelerates economic growth by increasing genetic diversity just enough, which we term The Goldilocks Principle.