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The determinants of income in a Malthusian equilibrium

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  • Sharp, Paul
  • Strulik, Holger
  • Weisdorf, Jacob

Abstract

This study constructs a simple, two-sector Malthusian model with agriculture and industry, and uses it to identify the determinants of income in a Malthusian equilibrium. We make standard assumptions about preferences and technologies, 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 equilibrium income. More importantly, we also show that equilibrium 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.

Suggested Citation

  • Sharp, Paul & Strulik, Holger & Weisdorf, Jacob, 2012. "The determinants of income in a Malthusian equilibrium," Journal of Development Economics, Elsevier, vol. 97(1), pages 112-117.
    • Handle: RePEc:eee:deveco:v:97:y:2012:i:1:p:112-117
    DOI: 10.1016/j.jdeveco.2010.12.004
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    References listed on IDEAS

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    7. Juselius, Katarina, 2006. "The Cointegrated VAR Model: Methodology and Applications," OUP Catalogue, Oxford University Press, number 9780199285679, Decembrie.
    8. Strulik, Holger, 2010. "A Note On Economic Growth With Subsistence Consumption," Macroeconomic Dynamics, Cambridge University Press, vol. 14(5), pages 763-771, November.
    9. N. F. R. Crafts & C. K. Harley, 1992. "Output growth and the British industrial revolution: a restatement of the Crafts-Harley view," Economic History Review, Economic History Society, vol. 45(4), pages 703-730, November.
    10. Nicolini, Esteban A., 2007. "Was Malthus right? A VAR analysis of economic and demographic interactions in pre-industrial England," European Review of Economic History, Cambridge University Press, vol. 11(1), pages 99-121, April.
    11. 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, January.
    12. Gregory Clark, 2007. "Introduction to A Farewell to Alms: A Brief Economic History of the World," Introductory Chapters, in: A Farewell to Alms: A Brief Economic History of the World, Princeton University Press.
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    Cited by:

    1. David de la Croix & Eric B. Schneider & Jacob Weisdorf, 2019. "Childlessness, celibacy and net fertility in pre-industrial England: the middle-class evolutionary advantage," Journal of Economic Growth, Springer, vol. 24(3), pages 223-256, September.
    2. Bruno Lanz & Simon Dietz & Timothy Swanson, 2017. "Global Population Growth, Technology, And Malthusian Constraints: A Quantitative Growth Theoretic Perspective," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 58(3), pages 973-1006, August.
    3. Carl-Johan Dalgaard & Holger Strulik, 2015. "The physiological foundations of the wealth of nations," Journal of Economic Growth, Springer, vol. 20(1), pages 37-73, March.
    4. Bruno Lanz & Simon Dietz & Tim Swanson, 2018. "Global Economic Growth and Agricultural Land Conversion under Uncertain Productivity Improvements in Agriculture," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 100(2), pages 545-569.
    5. Holger Strulik, 2014. "Knowledge And Growth In The Very Long Run," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 55(2), pages 459-482, May.
    6. David de la Croix & Eric B. Schneider & Jacob Weisdorf, 2017. ""Decessit sine prole" Childlessness, Celibacy, and Survival of the Richest in Pre-Industrial England," LIDAM Discussion Papers IRES 2017001, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
    7. Kufenko, Vadim & Khaustova, Ekaterina & Geloso, Vincent, 2022. "Escape underway: Malthusian pressures in late imperial Moscow," Explorations in Economic History, Elsevier, vol. 85(C).
    8. Simon Dietz & Bruno Lanz, 2019. "Growth and Adaptation to Climate Change in the Long Run," CESifo Working Paper Series 7986, CESifo.
    9. Lanz, Bruno & Dietz, Simon & Swanson, Tim, 2018. "The Expansion of Modern Agriculture and Global Biodiversity Decline: An Integrated Assessment," Ecological Economics, Elsevier, vol. 144(C), pages 260-277.
    10. Bruno Lanz & Simon Dietz & Tim Swanson, 2016. "Economic growth and agricultural land conversion under uncertain productivity improvements in agriculture," FOODSECURE Working papers 53, LEI Wageningen UR.
    11. repec:got:cegedp:145 is not listed on IDEAS
    12. Ken Tabata, 2013. "The Expansion of the Commercial Sector and the Child Quantity-Quality Transition in a Malthusian World," Discussion Paper Series 105, School of Economics, Kwansei Gakuin University, revised May 2013.
    13. Rota, Mauro & Weisdorf, Jacob, 2019. "Expensive Labour and the Industrial Revolution: Evidence from Stable Employment in Rural Areas," CAGE Online Working Paper Series 442, Competitive Advantage in the Global Economy (CAGE).
    14. Kumon, Yuzuru, 2022. "How Landownership Equality Created a Low Wage Society: Pre-industrial Japan, 1600-1870," IAST Working Papers 22-138, Institute for Advanced Study in Toulouse (IAST).
    15. Fochesato, Mattia, 2018. "Origins of Europe’s north-south divide: Population changes, real wages and the ‘little divergence’ in early modern Europe," Explorations in Economic History, Elsevier, vol. 70(C), pages 91-131.
    16. Naso, Pedro & Lanz, Bruno & Swanson, Tim, 2020. "The return of Malthus? Resource constraints in an era of declining population growth," European Economic Review, Elsevier, vol. 128(C).
    17. Weisdorf, Jacob & Rota, Mauro, 2020. "Italy and the Industrial Revolution: Evidence from Stable Employment in Rural Areas," CEPR Discussion Papers 14652, C.E.P.R. Discussion Papers.
    18. Cellarier, Laurent L., 2021. "Is landownership a ladder out of poverty?," World Development, Elsevier, vol. 146(C).

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    More about this item

    Keywords

    Malthusian model; Subsistence income;

    JEL classification:

    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth
    • N1 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations

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