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Agricultural Employment and the Economic Transition from Malthus to Solow

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Abstract

We develop a simple model where the final output is produced using two technologies—one with diminishing returns and another with constant returns—and labor as the sole input. We show that the rate of decline in the share of agricultural employment is a sufficient statistic for the onset of economic transition from stagnation to sustained growth. Our quantitative results are consistent with the implications for the evolution of per capita income for economies in various stages of development and structural transformation.

Suggested Citation

  • B. Ravikumar & Guillaume Vandenbroucke, 2026. "Agricultural Employment and the Economic Transition from Malthus to Solow," Review, Federal Reserve Bank of St. Louis, vol. 108(1), pages 1-8, February.
    • Handle: RePEc:fip:fedlrv:102435
    DOI: 10.20955/r.2026.01
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    References listed on IDEAS

    as
    1. Tamura, Robert, 2002. "Human capital and the switch from agriculture to industry," Journal of Economic Dynamics and Control, Elsevier, vol. 27(2), pages 207-242, December.
    2. B. Ravikumar & Guillaume Vandenbroucke, 2025. "On the Transition to Sustained Growth: The Importance of Recent Agricultural Employment," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 58, October.
    3. Fernández-Villaverde, Jesús & Delventhal, Matthew J. & Guner, Nezih, 2021. "Demographic Transitions Across Time and Space," CEPR Discussion Papers 16708, Centre for Economic Policy Research.
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    Keywords

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    JEL classification:

    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General

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