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Endogenous fertility, mortality and economic growth: Can a Malthusian framework account for the conflicting historical trends in population?

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  • Ehrlich, Isaac
  • Kim, Jinyoung

Abstract

The 19th century economist, Thomas Robert Malthus, hypothesized that the long-run supply of labor is completely elastic at a fixed wage-income level because population growth tends to outstrip real output growth. Dynamic equilibrium with constant income and population is achieved through equilibrating adjustments in "positive checks" (mortality, starvation) and "preventive checks" (marriage, fertility). Developing economies since the Industrial Revolution, and more recently especially Asian economies, have experienced steady income growth accompanied by sharply falling fertility and mortality rates. We develop a dynamic model of endogenous fertility, longevity, and human capital formation within a Malthusian framework that allows for diminishing returns to labor but also for the role of human capital as an engine of growth. Our model accounts for economic stagnation with high fertility and mortality and constant population and income, as predicted by Malthus, but also for takeoffs to a growth regime and a demographic transition toward low fertility and mortality rates, and a persistent growth in per-capita income.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of Asian Economics.

Volume (Year): 16 (2005)
Issue (Month): 5 (October)
Pages: 789-806

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Handle: RePEc:eee:asieco:v:16:y:2005:i:5:p:789-806

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  1. Kalemli-Ozcan, Sebnem, 2002. " Does the Mortality Decline Promote Economic Growth?," Journal of Economic Growth, Springer, vol. 7(4), pages 411-39, December.
  2. Becker, Gary S, 1988. "Family Economics and Macro Behavior," American Economic Review, American Economic Association, vol. 78(1), pages 1-13, March.
  3. Tamura, Robert, 2002. "Human capital and the switch from agriculture to industry," Journal of Economic Dynamics and Control, Elsevier, vol. 27(2), pages 207-242, December.
  4. Oded Galor & Omer Moav, 2004. "From Physical to Human Capital Accumulation: Inequality and the Process of Development," Review of Economic Studies, Oxford University Press, vol. 71(4), pages 1001-1026.
  5. Gary D. Hansen & Edward C. Prescott, 1998. "Malthus to Solow," NBER Working Papers 6858, National Bureau of Economic Research, Inc.
  6. Becker, Gary S & Murphy, Kevin M & Tamura, Robert, 1990. "Human Capital, Fertility, and Economic Growth," Journal of Political Economy, University of Chicago Press, vol. 98(5), pages S12-37, October.
  7. David N. Weil & Oded Galor, 2000. "Population, Technology, and Growth: From Malthusian Stagnation to the Demographic Transition and Beyond," American Economic Review, American Economic Association, vol. 90(4), pages 806-828, September.
  8. Kremer, Michael, 1993. "Population Growth and Technological Change: One Million B.C. to 1990," The Quarterly Journal of Economics, MIT Press, vol. 108(3), pages 681-716, August.
  9. Ehrlich, Isaac & Lui, Francis T, 1991. "Intergenerational Trade, Longevity, and Economic Growth," Journal of Political Economy, University of Chicago Press, vol. 99(5), pages 1029-59, October.
  10. Matthias Doepke, 2001. "Accounting for Fertility Decline During the Transition to Growth," UCLA Economics Working Papers 804, UCLA Department of Economics.
  11. Ehrlich, Isaac & Lui, Francis, 1997. "The problem of population and growth: A review of the literature from Malthus to contemporary models of endogenous population and endogenous growth," Journal of Economic Dynamics and Control, Elsevier, vol. 21(1), pages 205-242, January.
  12. L. Wade, 1988. "Review," Public Choice, Springer, vol. 58(1), pages 99-100, July.
  13. Lucas, Robert Jr., 1988. "On the mechanics of economic development," Journal of Monetary Economics, Elsevier, vol. 22(1), pages 3-42, July.
  14. Robert E. Lucas, Jr., 2004. "The Industrial Revolution: past and future," Annual Report, Federal Reserve Bank of Minneapolis, issue May, pages 5-20.
  15. Sato, Kazuo, 2002. "From fast to last: the Japanese economy in the 1990s," Journal of Asian Economics, Elsevier, vol. 13(2), pages 213-235.
  16. Kalemli-Ozcan, Sebnem & Ryder, Harl E. & Weil, David N., 2000. "Mortality decline, human capital investment, and economic growth," Journal of Development Economics, Elsevier, vol. 62(1), pages 1-23, June.
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Cited by:
  1. Strulik, Holger & Weisdorf, Jacob, 2008. "Birth, Death, and Development: A Simple Unified Growth Theory," Diskussionspapiere der Wirtschaftswissenschaftlichen Fakultät der Leibniz Universität Hannover dp-412, Leibniz Universität Hannover, Wirtschaftswissenschaftliche Fakultät.
  2. Strulik, Holger & Weisdorf, Jacob, 2010. "How Child Costs and Survival Shaped the Industrial Revolution and the Demographic Transition: A Theoretical Inquiry," Diskussionspapiere der Wirtschaftswissenschaftlichen Fakultät der Leibniz Universität Hannover dp-442, Leibniz Universität Hannover, Wirtschaftswissenschaftliche Fakultät.
  3. Lehmijoki, Ulla & Palokangas, Tapio K., 2011. "The Long-Run Effects of Mortality Decline in Developing Countries," IZA Discussion Papers 5422, Institute for the Study of Labor (IZA).
  4. Pierre-Richard Agénor, 2006. "A Theory of Infrastructure-led Development," Centre for Growth and Business Cycle Research Discussion Paper Series 83, Economics, The Univeristy of Manchester.
  5. Ulla Lehmijoki & Tapio Palokangas, 2010. "Demographic and Economic Consequences of the Post-war Mortality Decline in Developing Countries," DEGIT Conference Papers c015_010, DEGIT, Dynamics, Economic Growth, and International Trade.
  6. Ehrlich, Isaac & Yin, Yong, 2014. "Equilibrium Health Spending and Population Aging in a Model of Endogenous Growth: Will the GDP Share of Health Spending Keep Rising?," IZA Discussion Papers 7928, Institute for the Study of Labor (IZA).

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