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Luddites and the Demographic Transition

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  • O'Rourke, Kevin H
  • Rahman, Ahmed
  • Taylor, Alan M

Abstract

Technological change was unskilled-labor-biased during the early Industrial Revolution, but is skill-biased today. This is not embedded in extant unified growth models. We develop a model which can endogenously account for these facts, where factor bias reflects profit maximizing decisions by innovators. Endowments dictate that the early Industrial Revolution be unskilled-labor-biased. Increasing basic knowledge causes a growth takeoff, an income-led demand for fewer educated children, and the transition to skill-biased technological change. The simulated model tracks British industrialization in the 18th and 19th centuries and generates a demographic transition without relying on either rising skill premia or exogenous educational supply shocks.

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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 7045.

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Date of creation: Nov 2008
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Handle: RePEc:cpr:ceprdp:7045

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Keywords: demography; endogenous growth; unified growth theory;

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Cited by:
  1. Quamrul Ashraf & Oded Galor, 2010. "Dynamics and Stagnation in the Malthusian Epoch," Center for Development Economics 2010-07, Department of Economics, Williams College, revised May 2011.
  2. Galor, Oded, 2009. "2008 Lawrence R. Klein Lecture -- Comparative Economic Development: Insights from Unified Growth Theory," CEPR Discussion Papers 7519, C.E.P.R. Discussion Papers.
  3. Kevin H. O’Rourke & Ahmed S. Rahman & Alan M. Taylor, 2012. "Trade, Technology and the Great Divergence," Departmental Working Papers 35, United States Naval Academy Department of Economics.
  4. Sara LaLumia & James Sallee, 2013. "The value of honesty: empirical estimates from the case of the missing children," International Tax and Public Finance, Springer, vol. 20(2), pages 192-224, April.
  5. Joshua Wilde, 2013. "How Substitutable are Fixed Factors in Production? Evidence from Pre-industrial England," Working Papers 0113, University of South Florida, Department of Economics.
  6. Marc Patrick Brag Klemp & Niels Framroze Møller, 2013. "Post-Malthusian Dynamics in Pre-Industrial Scandinavia," Working Papers 2013-14, Brown University, Department of Economics.
  7. J. Glaser, Darrell & S. Rahman, Ahmed, 2011. "Human Capital and Technological Transition: Insights from the U.S. Navy," The Journal of Economic History, Cambridge University Press, vol. 71(03), pages 704-729, September.
  8. Marc Klemp & Jacob Weisdorf, 2011. "The Child Quantity-Quality Trade-Off During the Industrial Revolution in England," Discussion Papers 11-16, University of Copenhagen. Department of Economics.
  9. Ahmed S. Rahman, 2010. "An Exceptionally Simple Theory of Industrialization," Departmental Working Papers 27, United States Naval Academy Department of Economics.
  10. Darrell J. Glaser & Ahmed S. Rahman, 2010. "The Value of Human Capital during the Second Industrial Revolution—Evidence from the U.S. Navy," Departmental Working Papers 28, United States Naval Academy Department of Economics.

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