Was the post-1870 fertility transition a key contributor to growth in the West in the twentieth century?
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Was the post‑1870 fertility transition a key contributor to growth in the West in the twentieth century? Jakob B. Madsen1 · Md. Rabiul Islam2 · Xueli Tang3 Accepted: 5 September 2020 © Springer Science+Business Media, LLC, part of Springer Nature 2020
Abstract The fertility transition that took place in the West from approximately the 1870s to the 1970s is often suggested to have been instrumental for the shift from the post-Malthusian growth regime to the modern growth regime. Constructing a unique data set over the period 1820–2015 for 21 advanced countries, this paper tests whether fertility has had real economic effects through the channels of education, saving, investment and female labor force participation rates. The dairy-cereal price ratio and the pastoral-land ratio are used as instruments for fertility. The results indicate that the fertility transition has been a significant contributor to growth since the 1880s and, consequently, was pivotal for the transition to the modern growth regime. Keywords The great fertility transition · Growth and fertility · Transmission channels JEL Classification J1 · O4
1 Introduction Growth spurts are often associated with demographic transitions. For example, the per capita income growth rates in the advanced countries increased substantially during the demographic transition (Galor 2005), and the decline in fertility is often suggested to be a crucial factor behind the transition from the post-Malthusian to the modern growth regime (Galor and Weil 2000; Galor 2005, 2010; Voigtländer and Voth 2006; Dalgaard and Strulik 2013). Even more rapid growth and fertility transitions have been observed in the Asian Miracle economies in the post-WWII period (Bloom and Williamson 1998; Madsen and Electronic supplementary material The online version of this article (https://doi.org/10.1007/s1088 7-020-09183-6) contains supplementary material, which is available to authorized users. * Jakob B. Madsen [email protected] 1
Department of Economics, University of Western Australia, 35 Stirling Hwy, Perth, WA 6009, Australia
2
Department of Economics, Monash University, Clayton, Australia
3
Department of Economics, Deakin University, Melbourne, Australia
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Vol.:(0123456789)
Journal of Economic Growth
Ang 2013), and Liao (2011) finds, from general equilibrium model calibrations, that the fertility transition explains a third of per capita income growth in Taiwan over the period 1970–2004. The apparent close relationship between fertility transitions and growth transitions raises the question of whether there is a causal relationship between the two and whether a fertility transition is a precondition for a shift from a post-Malthusian growth regime to a modern growth regime, as effectively argued by Galor (2005). This paper seeks to uncover the productivity effects of fertility transitions through the channels of school enrollment, saving, investment and female labor force participation following the predictions of the models of Galor and Weil (1996, 2000); Gal
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