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Testing Unified Growth Theory: Technological Progress and the Child Quantity--Quality Trade-off

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  • Strulik, Holger

Abstract

A core mechanism of unified growth theory is that accelerating technological progress induces mass education and, in interaction with child quantity-quality substitution, a decline in fertility. Using unique new data for 21 OECD countries over the period 1750-2000, we test, for the first time, the validity of this core mechanism of unified growth theory. We measure a country's technological progress as patents per capita, genetic-distance weighted foreign patents, and investment in machinery, equipment and intellectual property products. Controlling for other confounders like income, mortality, the gender wage gap, indicators for child labor, compulsory schooling, and time- and countryfixed effects, we establish a strong positive impact of technological progress on investments in education and a strongly negative one on fertility. Using two-stage regressions, we assess the child quantity-quality substitution that can be motivated by technological change. We estimate that a 10 percent increase of enrollment in primary and secondary school is associated with a decline of the general fertility rate by 3 to 4 percent.

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  • Strulik, Holger, 2021. "Testing Unified Growth Theory: Technological Progress and the Child Quantity--Quality Trade-off," VfS Annual Conference 2021 (Virtual Conference): Climate Economics 242329, Verein für Socialpolitik / German Economic Association.
  • Handle: RePEc:zbw:vfsc21:242329
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    2. Carl-Johan Dalgaard & Jakob B. Madsen & Holger Strulik, 2021. "Physiological constraints and the transition to growth: implications for comparative development," Journal of Economic Growth, Springer, vol. 26(3), pages 241-289, September.

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    More about this item

    Keywords

    technological progress; fertility; education; quantity-quality trade-off; unifiedgrowth theory;
    All these keywords.

    JEL classification:

    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General
    • N30 - Economic History - - Labor and Consumers, Demography, Education, Health, Welfare, Income, Wealth, Religion, and Philanthropy - - - General, International, or Comparative
    • J10 - Labor and Demographic Economics - - Demographic Economics - - - General
    • I25 - Health, Education, and Welfare - - Education - - - Education and Economic Development

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