Research program : From Stagnation to Growth

The transition from a world of low economic growth with high mortality and high fertility to one with low mortality and fertility but sustained growth has been the subject of intensive research in recent years. Over this whole transition, there is a very strong correlation between adult longevity and income. The relation between these two variables is also very strong in a cross section of countries today. This strong relationship is obviously very important to understand the processes that led the various countries through the transition from stagnation to sustained growth (industrial revolution), but is also key to improve the design of today’s development policy. It is undisputed that longevity was positively influenced by standard of livings. However, the question on whether longevity played a key role in the industrial revolution is disputed. In this project we defend the idea that longevity is a key factor. One important mechanism through which longevity operates is through the incentives to get education when the length of life increases. The research also involves using various data sets: Geneva and Venice longevity data before the Industrial Revolution, mortality data of English aristocrats, evidence on the rise in medical knowledge, and height of Swedish soldiers.

Here is a short data-oriented survey of the question addressed in the papers of this section.

download Adult Longevity and Economic Take-off: from Malthus to Ben-Porath, in "Institutional and Social Dynamics of Growth and Distribution", Neri Salvadori ed., Edward Elgard, chap 8, 172-190.


A trade-off between the quantity of children and their development

The epidemiology literature stresses that life expectancy depends greatly on physical development during childhood. Both better nutrition and lower exposure to infections leads to increased body height and a longer life.

We propose a theory of the demographic transition based on this fact. The novel mechanism of the model is that parents face a trade-off between the quantity of children they have and the amount they can afford to spend on childhood development of each of them.

If the cost of health decreases, parents will increase their investment in their children’s longevity. The number of children will first increase in the Malthusian regime as a consequence of higher lifetime income. As longevity rises, fertility starts falling as a result of the tradeoff faced by parents between investing in their own human capital and spending time rearing children.

Survival laws in France

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Ben-Porath mechanism with endogenous growth

Longevity increased very much over the last four centuries.
On the right, we display the shifts in the survival function for France.

  • This rise substantially modified the composition of population by age.
  • It may also have provided incentives to get education (this mechanism is called the [Yoram] Ben-Porath mechanism).

In Life expectancy and endogenous growth we show two results:

  • The length of time devoted to schooling depends positively on life expectancy.
  • The effect of life expectancy on growth is positive for economies with a relatively low life expectancy, but could be negative in more advanced economies.

In, Vintage Human Capital, Demographic Trends and Endogenous Growth he above results are generalized for a realistic survival law of the form of the form

Survival law function

(a: age, m(a): survival probability, alpha and beta are two parameters)

 Survival laws in France

In Early Mortality Declines at the dawn of Modern Growth, Scandinavian Journal of Economics, increases in longevity can be responsible for a shift from a no-growth regime to a sustained growth regime. For this purpose, we use life tables prior to the industrial revolution (from Geneva and Venice), observe the improvements in longevity over the period 1500-1800, and use the model to assess quantitatively the effects on growth of these improvements.

Finally, a technical point: The dynamics of our models are described by differentials-difference equations. They account for discrete timing decisions in continuous time. More in Modeling vintage structures with DDEs: principles and applications.

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The co-authors (at Iza Bonn, 2006)

Raouf, Omar and I

An additional mechanism with population density

In two subsequent researches, we develop the approach further by introducing an additional mechanism through which higher population density may trigger the transition from stagnation to growth. In Early literacy achievements, population density and the transition to modern growth we provide micro-foundations according to which higher population density enables the set-up costs of additional schools to be covered, opening the possibility to reach higher educational levels. We also calibrate and simulate the model on English data 1540-1860. (see the section on History).

A reduced form version of the same mechanism is applied on Swedish data in Swedish Economic Growth and Education Since 1800, where we make use of original education data. We conclude there that It concludes that changes in longevity may account for as much as 20% of the observed rise in education over the period from 1800-2000 via a horizon effect, but have little impact on income growth over the period. On the contrary, changes in population density and composition are central, mainly thanks to their effect on productivity. Most income growth over this period would not have materialized if demographic variables had stayed constant since 1800.

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