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The Determinants of Subsistence Income in a Malthusian World

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  • Paul Sharp
  • Holger Strulik
  • Jacob Weisdorf

Abstract

This study constructs a simple, two-sector Malthusian model with agriculture and industry, and uses it to identify the determinants of subsistence income. We make standard assumptions about preferences and production technology, but in contrast to existing studies we assume that children and other consumption goods are gross substitutes. Consistent with the conventional Malthusian model, the present theory shows that productivity growth in agriculture has no effect on subsistence income. More importantly, we also show that subsistence income varies, not just with the death rate as has recently been demonstrated in the literature, but also with the level of productivity in the industrial sector. An empirical analysis using data for pre-industrial England lends support to both hypotheses.

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File URL: http://gcoe.ier.hit-u.ac.jp/research/discussion/2008/pdf/gd09-133.pdf
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Paper provided by Institute of Economic Research, Hitotsubashi University in its series Global COE Hi-Stat Discussion Paper Series with number gd09-133.

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Date of creation: Mar 2010
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Handle: RePEc:hst:ghsdps:gd09-133

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Keywords: Malthusian Model; Subsistence Income;

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  1. Kevin O’rourke & Jeffrey Williamson, 2005. "From Malthus to Ohlin: Trade, Industrialisation and Distribution Since 1500," Journal of Economic Growth, Springer, vol. 10(1), pages 5-34, 01.
  2. Holger Strulik & Jacob Weisdorf, 2008. "Population, food, and knowledge: a simple unified growth theory," Journal of Economic Growth, Springer, vol. 13(3), pages 195-216, September.
  3. Quamrul Ashraf & Oded Galor, 2008. "Malthusian Population Dynamics: Theory and Evidence," Working Papers 2008-6, Brown University, Department of Economics.
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Cited by:
  1. Hans-Joachim Voth, 2013. "The Three Horsemen of Riches: Plague, War, and Urbanization in Early Modern Europe," Review of Economic Studies, Oxford University Press, vol. 80(2), pages 774-811.

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