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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. Claudia Goldin & Lawrence F. Katz, 1998. "The Origins Of Technology-Skill Complementarity," The Quarterly Journal of Economics, MIT Press, vol. 113(3), pages 693-732, August.
  2. Oded Galor & Omer Moav, 2000. "Natural Selection and the Origin of economic Growth," Working Papers 2000-18, Brown University, Department of Economics.
  3. William A. Masters & Margaret S. McMillan, 2000. "Climate and Scale In Economic Growth," CID Working Papers 48, Center for International Development at Harvard University.
  4. 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.
  5. Gary S. Becker, 1981. "A Treatise on the Family," NBER Books, National Bureau of Economic Research, Inc, number beck81-1, December.
  6. Herschel I. Grossman & Juan Mendoza, 1999. "Scarcity and Conflict," Working Papers 99-24, Brown University, Department of Economics.
  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. Daron Acemoglu & Simon Johnson & James A. Robinson, 2001. "Reversal of Fortune: Geography and Institutions in the Making of the Modern World Income Distribution," NBER Working Papers 8460, National Bureau of Economic Research, Inc.
  9. Marvin Goodfriend & John McDermott, 1994. "Early development," Working Paper 94-02, Federal Reserve Bank of Richmond.
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Cited by:
  1. Oded_Galor & Omer Moav, 2004. "Natural Selection and the Evolution of Life Expectancy," Working Papers 2004-14, Brown University, Department of Economics.

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