Abstract
We develop a quantitative model that is consistent with three principal building blocks of Unified Growth Theory: the break-out from economic stagnation, the build-up to the Industrial Revolution, and the onset of the fertility transition. Our analysis suggests that England’s escape from the Malthusian trap was triggered by the demographic catastrophes in the aftermath of the Black Death; household investment in children ultimately raised wages despite an increasing population; and rising human capital, combined with the increasing elasticity of substitution between child quantity and quality, reduced target family size and contributed to the fertility transition.
Highlights
We develop a unified growth (UG) model (Galor and Weil 2000; Galor and Moav 2002; Galor 2011) that closely fits a wide range of data for the English economy
We develop a quantitative model that is consistent with three principal building blocks of Unified Growth Theory: the break-out from economic stagnation, the build-up to the Industrial Revolution, and the onset of the fertility transition
The model is consistent with the technology-driven explanations of Unified growth theories (UGTs) supplemented by exogenous mortality
Summary
We develop a unified growth (UG) model (Galor and Weil 2000; Galor and Moav 2002; Galor 2011) that closely fits a wide range of data for the English economy. We show that the data imply an increasing trade-off between child quantity and quality, with the elasticity of substitution between quantity and quality rising as extreme mortality impacts As this elasticity increases, the Malthusian demand for number of children responds less to higher wages, and the negative effect of human capital growth on the demand for children becomes stronger. Econometric analyses (Crafts 1984; Tzannatos and Symons 1989) present exogenous changes in generalized English child costs and quality as transition explanations without longer period ambitions Their identification is weaker than in our model.. Both these costs and human capital accumulation reduce fertility This resembles the process discussed by Galor and Weil (2000); unlike them, we do not assign a positive role to population growth in technological progress because Crafts and Mills (2009), who studied the English population found no evidence for it.
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