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Trading Population for Productivity: Theory and Evidence

Author

Listed:
  • Oded Galor
  • Andrew Mountford

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 has been chanelled 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. Copyright 2008, Wiley-Blackwell.

Suggested Citation

  • Oded Galor & Andrew Mountford, 2008. "Trading Population for Productivity: Theory and Evidence," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 75(4), pages 1143-1179.
    • Handle: RePEc:oup:restud:v:75:y:2008:i:4:p:1143-1179
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    File URL: http://hdl.handle.net/10.1111/j.1467-937X.2008.00501.x
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    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, Health, Welfare, Income, Wealth, Religion, and Philanthropy - - - General, International, or Comparative
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General

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