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Geography, demography, and early development

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  • Murat Iyigun

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Abstract

This paper explores the role of geography in economic development and demographic transition. It presents a growth model where survival is endogenously determined and where the odds of survival and the returns to labor are higher in geographically favorable regions. Higher life expectancy prompts parents to devote more of their resources to old-age consumption and enjoyment. Consequently, the invest relatively more in the quantity and quality of their offspring. Investment in education, together with population growth eventually triggers technological progress. As the level of technology improves and life expectancy rises along with it, a geographically advantageous economy first enters a post-Malthusian regime during which both fertility and educational attainment increase. Then, as further improvements in technology lead to a higher education premium, such an economy undergoes a demographic transition during which life expectancy continues to rise and parents have fewer but more educated children. In regions where geography is more adverse, this transition does not take place and economies remain trapped in the Malthusian regime. Thus, accounting for the role of geography in development helps to link demographic transition to geography and shows that the latter affects the economy mostly indirectly through the impact of geography on households' demographic choices. In the early stages of development, those choices in turn determine whether economies attain the scale and scope necessary for sustained economic progress. The paper also provides a framework with which to asses why geography may matter less today.

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File URL: http://hdl.handle.net/10.1007/s00148-004-0212-3
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Bibliographic Info

Article provided by Springer in its journal Journal of Population Economics.

Volume (Year): 18 (2005)
Issue (Month): 2 (06)
Pages: 301-321

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Handle: RePEc:spr:jopoec:v:18:y:2005:i:2:p:301-321

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Related research

Keywords: J13; O11; O33; Human capital; demographic transition; growth;

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References

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  1. Robert E. Hall & Charles I. Jones, 1999. "Why Do Some Countries Produce So Much More Output per Worker than Others?," NBER Working Papers 6564, National Bureau of Economic Research, Inc.
  2. Galor, Oded & Moav, Omer, 2001. "Natural Selection and the Origin of Economic Growth," CEPR Discussion Papers 2727, C.E.P.R. Discussion Papers.
  3. William A Masters and Margaret S McMillan, 2000. "Climate and Scale in Economic Growth," Economics Series Working Papers WPS/2000-13, University of Oxford, Department of Economics.
  4. Olsson, Ola & Hibbs, Douglas Jr., 2005. "Biogeography and long-run economic development," European Economic Review, Elsevier, vol. 49(4), pages 909-938, May.
  5. Daron Acemoglu & Simon Johnson & James A. Robinson, 2002. "Reversal Of Fortune: Geography And Institutions In The Making Of The Modern World Income Distribution," The Quarterly Journal of Economics, MIT Press, vol. 117(4), pages 1231-1294, November.
  6. Claudia Goldin & Lawrence F. Katz, 1996. "The Origins of Technology-Skill Complementarity," NBER Working Papers 5657, National Bureau of Economic Research, Inc.
  7. Herschel I. Grossman & Juan Mendoza, 1999. "Scarcity and Conflict," Working Papers 99-24, Brown University, Department of Economics.
  8. Goodfriend, Marvin & McDermott, John, 1995. "Early Development," American Economic Review, American Economic Association, vol. 85(1), pages 116-33, March.
  9. 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.
  10. Gary S. Becker, 1981. "A Treatise on the Family," NBER Books, National Bureau of Economic Research, Inc, number beck81-1, May.
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Cited by:
  1. Oded Galor & Omer Moav, 2006. "Natural Selection and the Evolution of Life Expectancy," DEGIT Conference Papers c011_062, DEGIT, Dynamics, Economic Growth, and International Trade.

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