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Trading Population for Productivity: Theory and Evidence

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Author Info
Galor, Oded
Mountford, Andrew

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Abstract

This research argues that the differential effect of international trade on the demand for human capital across countries has been a major determinant of the distribution of income and population across the globe. In developed countries the gains from trade have been directed towards investment in education and growth in income per capita, whereas a significant portion of these gains in less developed economies have been channelled towards population growth. Cross-country regressions establish that indeed trade has positive effects on fertility and negative effects on education in non-OECD economies, while inducing fertility decline and human capital formation in OECD economies.

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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 6678.

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Date of creation: Feb 2008
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Handle: RePEc:cpr:ceprdp:6678

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Keywords: Demographic Transition Growth Human Capital International Trade

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Find related papers by JEL classification:
F11 - International Economics - - Trade - - - Neoclassical Models of Trade
F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
J10 - Labor and Demographic Economics - - Demographic Economics - - - General
N30 - Economic History - - Labor and Consumers, Demography, Education, Income, and Wealth - - - General, International, or Comparative
O40 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General

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