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Early literacy achievements, population density and the transition to modern growth

  • Economics department, UCL, Louvain,David de la Croix, CORE
  • Raouf Boucekkine

    ()

    (Economics Université catholique de Louvain)

  • David de la Croix

    (Economics Université catholique de Louvain)

  • Dominique Peeters

    (CORE and the department of Geography, UCL, Louvain)

The transition from economic stagnation to sustained growth is often modelled thanks to "population-induced" productivity improvements, which are assumed rather than derived from primary assumptions. In this paper, the effect of population on productivity is derived from optimal behavior. Both the number and location schools are chosen optimally by municipalities. Individuals determine their education investment depending on the distance to the nearest school, and also on technical progress and longevity. In this setting, higher population density enables the set-up costs of additional schools to be covered, opening the possibility to reach higher education levels. Using counterfactual experiments, we find that one third of the rise in literacy can be directly attributed to the population density effect, while one sixth is linked to higher longevity and one half to technical progress. Moreover, the effect of population density in the model is consistent with available evidence for England

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Paper provided by Society for Computational Economics in its series Computing in Economics and Finance 2006 with number 205.

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Date of creation: 04 Jul 2006
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Handle: RePEc:sce:scecfa:205
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