Human capital,technological progress and the demographic transition*

We emphasize the importance to consider components of population growth — fertility and mortality ‐ separately, when modeling the mutual interaction between population and economic growth. Our model implies that two countries with the same population growth will not converge towards the same level of per capita income. The country with the lower level of birth and death rates will be better off in the long run. Introducing a spill over effect of average human capital on total productivity our model implies multiple equilibria as illustrated in Becker el al. (1990) and Strulik (1999). Besides the existence of a low and high level equilibrium ‐ as characterized by low and high levels of per capita output respectively ‐ we show the existence of multiple low level (Malthusian) equilibria. Initial conditions and parameters of technological progress and human capital investment determine whether an economy is capable to escape the low level equilibrium trap and to enjoy sustained economic growth.     

Countries with Rapid Population Growth and Resource Constraints: Issues of Food,Agriculture, and Development

Recent long‐term demographic projections suggest a fast deceleration of global population growth and the eventual peaking of world population later in this century at about 9.2 billion, roughly 50 percent above the present level. Some low‐income and food‐insecure countries, however, have projected populations in 2050 that are multiples of present ones. In some of these countries agriculture must play a leading role in their development efforts because they have high economic dependence on that sector. For those among them that have scarce agricultural resources, a prima facie case can be made that the high population growth rates projected may not be compatible with the development potential offered by such resources. Their demographic projections may need to be revisited, taking into account such inadequate potential. The global demographic slowdown notwithstanding, the “population explosion”‐related issues pertaining to food and agriculture will not become irrelevant but will be become increasingly localized.     

A stochastic version of the malthusian trap model: Consequences for the empirical relationship between economic growth and population growth in LDC's

A stochastic version of the Malthusian trap model relating the growth rate of income per capita to the population growth rate of a given country is described. This model is applied to the a priori evaluation of the cross‐sectional correlation between these two growth rates under two additional assumptions: i) the relations in the model at national levels include country‐specific and time‐invariant random components, and ii) these growth rates are measured with a certain degree of temporal aggregation. It is shown that these two assumptions can explain near‐zero correlations between the two growth rates even if there exist a strongly negative effect of population growth on economic growth. However it is not clear whether these assumptions fully explain such insignificant correlations. Indeed, the implementation of the model is complicated by the structural shifts which are likely to occur in the equations over the course of the demographic transition.     

Conditions determining the local stability of populations

The conditions that determine the local stability classification of an equilibrium population configuration are analyzed. The population investigated is age‐structured and density‐dependent, where density is determined by an age‐weighted population size. Two demographic parameters are introduced: the marginal birth rate and marginal death rate, which describe the marginal density‐dependence of the birth and death rates of the equilibrium population. Certain necessary and/or sufficient conditions determining stability are developed, most of them involving the net reproduction rate of the population, and examples illustrating these conditions are presented.     

Learning-by-doing,population pressure,and the theory of demographic transition

The present paper discusses the long-run effects of two interdependent relations between economic and population growth. According to a frequently used formulation of the population-push hypothesis, learning-by-doing effects in production lead to increasing returns to scale and, therefore, to a positive correlation between economic and population growth. In accordance to the theory of demographic transition the population growth rate initially increases with rising income levels and then declines. Regarding this relationship, the existence and stability of a low-income equilibrium and a high-income equilibrium will be shown in a neoclassical growth model. Under plausible conditions a demo-economic transition from the first to the second steady-state takes place. The result yields a meaningful interpretation of the population-push hypothesis, which is consistent with the empirical findings on the correlation between economic and population growth. Received March 8, 1996 / Accepted October 24, 1996     

Exposure,Resistance and Life Expectancy: Disease and Death During the Economic Development of Japan, 1900–1960

By 1900 Japan was still extremely poor, rural and predominantly agrarian: but it had achieved effective mortality parity with the more economically advanced and/or wealthier countries of Western Europe. As standards of living rose, life expectancy remained relatively stagnant until the end of World War II. Subsequently, in spite of the economy being still partially crippled by wartime destruction, life expectancy in Japan increased very rapidly. The analysis of these puzzling trends is undertaken by means of an historical model of mortality change in which life expectancy is interpreted as the function of both the relative overall resistance of the population to disease, and the degree to which it was protected from exposure to the leading causes of death. It is argued that the early and late Japanese achievement of relatively high life expectancy at relatively low levels of income rested on the government's efficient delivery of a very high level of protection from exposure to disease. The middle period, 1910 to 1940, represented a relative failure of protection due to the concentration of financial resources on the military sector; a failure which better diets etc. could not effectively counter. The post-war period involved a return to higher levels of investment in public health during a period of technological progress and structural shifts which enhanced the efficiency of such investment.     

Alvin Hansen on Economic Progress and Declining Population Growth

The driving forces of economic growth, according to the mainstream of classical economic thinking, are threefold: technological innovations, the opening up of new territories and discovery of new resources, and increase in population. In interaction, in an entrepreneurial market economy, these forces generate growth not only in the aggregate but also per capita. Evidence of their power was seen in the long stretch of rising living standards in the West over the nineteenth century, despite the ups and downs of the business cycle. However, the economic experience of the interwar years, and in particular the Great Depression of the 1930s, suggested that the forces were largely spent and hence that future economic prospects were gravely imperiled. The Keynesian revolution in economics was a response to the evident malfunctioning of the capitalist economic system, although the policy recipes it offered (for increasing demand and investment to levels capable of generating an equilibrium consistent with full employment of productive resources, especially labor) by no means commanded unanimity. The most prominent American contributor to and spokesman for the new line of economic analysis—often called “the American Keynes”—was Alvin H. Hansen (1887–1975), who took up his professorship of political economy at Harvard in 1937, just after the appearance of Keynes's General Theory. In that post, which he held until his retirement in 1956, he was one of the most influential economists of the era as a theorist, policy adviser, and teacher. Hansen interpreted the economic problems of the 1930s not just as the manifestation of a particularly sharp cyclical downturn, but as evidence of secular stagnation caused by the closing of the economic frontier, sluggishness in technological innovation, and, not least, “a drastic decline in population growth.” This “stagnation thesis” is most succinctly set out in his presidential address to the American Economic Association, delivered in Detroit, 28 December 1938, under the title Economic Progress and Declining Population Growth. The address is re‐produced below from the March 1939 issue of the American Economic Review. (The opening paragraphs of the address, and two paragraphs, immediately preceding the closing paragraph, in which Hansen discusses changes in US national income in the 1930s, have been omitted.) Hansen's analysis of the effects of declining population growth in many ways echoes the thesis set out by Keynes in his seminal Galton Lecture delivered to the Eugenics Society in 1937 (reprinted in the Archives section of PDR 4, no. 3): a demographic slowdown decreases opportunities for profitable investments and increases levels of attempted saving, hence pushes the economy toward a low‐growth equilibrium at which resources are underutilized and unemployment is high. Hansen puts special emphasis on demographically induced shifts in the composition of output. He suggests that, beyond its direct positive effect on investment and output, population growth also has an indirect enhancing effect on these factors by facilitating technological progress–contrary to the “older Malthusian view.” In his policy proposals Hansen was more interventionist than Keynes, advocating a more intrusive government role in the economy as a possible means of escaping the vicious cycle of low demand and high unemployment. As to government action to reverse demographic trends seen as deleterious, neither Keynes nor Hansen argued for policies to increase fertility, presumably because they saw them as both inappropriate and, in comparison to remedial economic policy measures, inefficient or unfeasible. The demands of the war economy in the years following Hansen's address took care of the employment problem, and the immediate postwar decades brought the stimuli of pent‐up consumer demand, an outpouring of technological innovations, a reopening of the economic frontier produced by a more liberal trade regime, and, also, an acceleration of population growth. The result was rapid overall economic growth and increasing levels of per capita income. Keynesian demand management played some role in this economic success story: by the end of the 1960s even US President Richard Nixon pronounced himself a Keynesian. But it offered no remedy for the stagflation that eventually followed. The growth‐promoting recipes favored in the last decades of the century (especially in the most successful developing economies) were anything but Keynesian: limited government, fiscal restraint, and globalization. Yet recent and anticipated demographic trends, especially in Europe—notably fertility decline and population aging—make Hansen, once again, interesting reading. Commitments of the modern welfare state for health care, retirement pensions, and job security command wide approval, but they have boosted governments' weight in the economy and made labor markets inflexible, unemployment high, and retirement early—developments that may increasingly impose a brake on economic growth and on improvements of living standards. Reform measures to ease these burdens are, in principle, straightforward, but their immediate social costs are heavy and their rewards are delayed, hence resistance to reform is strong and growing. This is likely to stimulate the search for alternative policies that offer politically more palatable tradeoffs—some of which may turn out to have an unmistakably Hansenian flavor. As to future population trends, Hansen, despite his reference to a “drastic decline in population growth” based on a comparison of nineteenth‐ and twentieth‐century Western demographic change, envisaged a convergence to a stationary population or a tendency toward very slow decrease. Yet some economies are already locked into a demographic pattern that augurs sharper declines and more rapid population aging, enhancing the relevance of the issues posed by Hansen. In Germany, for example, in the absence of immigration, the population between ages 20 and 40 will decline from 21.6 million in 2005 to 16.3 million in 2025—a drop of 23 percent. Over the same time period, the population aged 60 and older will grow from 20.5 million to 25.8 million—an increase of 26 percent. Serious efforts to slow population decline and retard population aging by stimulating fertility would of course add another major burden to government budgets.     

Restructuring of the US Meat Processing Industry and New Hispanic Migrant Destinations

Findings from the 2000 US Census indicate high rates of Hispanic population increase beyond urban areas and traditional immigrant‐receiving states. The diversity of new destinations raises questions about forces attracting migrants to rural areas and links between economic structural change and Hispanic population growth. Our conceptual framework applies dual labor market theory to the meat processing industry, a sector whose growing Hispanic labor force offers an illustrative case study for analyzing how labor demand influences demographic change. We document the industry's consolidation, concentration, increased demand for low‐skilled labor, and changing labor force composition over three decades. We then position meat processing within a broader analysis that models nonmetropolitan county Hispanic population growth between 1980 and 2000 as a function of changes in industrial sector employment share and nonmetro county economic and demographic indicators. We find that growth in meat processing employment exhibits the largest positive coefficient increase in nonmetro Hispanic population growth over two decades and the largest impact of all sectors by 2000.     

Proletarianization with polarization: Industrialization, globalization, and social class in Turkey, 1980–2005

This paper analyzes the social class structure of Turkey during the latest wave of economic globalization in four dimensions: by sector of employment, with the Erikson–Goldthorpe–Portocarero (EGP) class schema, by occupational group, and in terms of informal employment. Since 1980, when Turkey opened to the global economy, the Turkish social class structure changed significantly. During this period, Turkey became a significant exporter of mostly low-technology, but also increasingly medium- and high-technology, manufactured goods. I contend that this economic globalization and industrialization contributed to a dual process of proletarianization and polarization. Proletarianization occurred through a transition from Turkey's agrarian tradition, a relative decline of the public sector, and an expansion of classes who sell their labor without workplace authority. Polarization entailed the growth of private-sector entrepreneurial, professional and managerial classes, and a simultaneous expansion of the informal sector. There were also differences between sexes. The share of manufacturing employment and the low-skilled labor classes expanded at rates much higher among women than among men, contributing to more rapid proletarianization.     

The optimum growth rate for population reconsidered

This article gives exact general conditions for the existence of an interior optimum growth rate for population in the neoclassical two-generations-overlapping model. In an economy where high (low) growth rates of population lead to a growth path that is efficient (inefficient), there always exists an interior optimum growth rate for population. In all other cases, there exists no interior optimum. The Serendipity Theorem, however, does, in general, not hold in an economy with government debt. Moreover, the growth rate for population that leads an economy with debt to a golden rule allocation can never be optimal.      

Market transition or path dependency?: Changing effects of income determinants in the Czech Republic,Hungary, Poland,Russia, and Slovakia, 1991–2002

A major issue in the market transition debate on transitional societies is the extent to which changing economic institutions are responsible for the changing stratification order in post-Communist societies, as assumed by the Market Transition Theory (MTT). Advocates of path dependent transformation processes assume varying transformation processes across post-Communist societies. They have criticized the MTT of being insensitive to the different paths of transformation post-Communist societies go through and the way this will influence changes in the effects of income determinants. This study will test the extent to which trends in the effects of income determinants converge across post-Communist societies. A cross-national and across time comparative research design will be employed, analyzing 61 cross-sectional, standardized surveys for five Central and Eastern countries covering the period 1991–2002. Results from modified weighted least squares regression analyses show an increasing trend in the effect of years of education on standardized personal income for all five countries as predicted by the MTT. Income effects of years of experience, private sector employment and gender do not show increasing trends for all countries, contradicting the MTT. The empirical trends in effects of income determinants are to a great extent consistent with Stark's typology of privatization strategies, giving some support to the theoretical notion of path dependent transformation processes.     

Fertility in urban areas of Mexico: Implications for the theory of the demographic transition

Recent investigations indicate that fertility is not universally associated with urbanization and economic development in the manner predicted by the theory of the demographic transition. It is possible, however, that these investigations only partially test the theory, for the degree of industrialization in urbanareas is rarely taken into account. Two hypotheses are tested based upon Mexican census and vital registration data for 1940-60: (a) urban fertility is inversely related to the proportion of the urban population employed in the secondary sector of the economy and (b) changes in urban fertility are inversely related to changes in the proportion of the urban population employed in the secondary sector of the economy.At each census date from 1940 to 1960, the association between urban fertility (age-standardized child-woman ratio adjusted for infant mortality) and the percent in the secondary sector is low and positive. In 1960, however, the association is negative (suggesting a possible change in the direction of the association), but city growth rates and the proportion of females married are more closely related to fertility than percent in the secondary sector. Hypothesis a, then, receives little support from the data.Much the same is true of hypothesis b. The association between changes in urban fertility and changes in the percent in the secondary sector is positive. Moreover, city growth rates and changes in the proportion literate explain more of the variation in fertility change than does the percent in the secondary sector.In addition, over-all fertility has risen since 1940, and this rise is pronounced in large urban areas. It is suggested that among certain segments of Mexican society, the response to economic development has been an increase rather than a reduction in fertility. It is further suggested that if city growth is indicative of rural-urban migration, the presence of large numbers of rural migrants in urbanareas may help to explain the decreasing size of the urban-rural fertility differential in Mexico.If this interpretation is correct, the theory of the demographic transition is in need of further modification, specification, and verification.     

人口转变、人口红利与经济增长可持续性--兼论充分就业如何促进经济增长

本文援引国际经验,把人口转变引致的不同人口年龄特征阶段看作是经济增长的一个额外源泉,或人口红利;论证了通过高储蓄率、充足的劳动力供给和低抚养比,中国人口转变对改革以来高速经济增长的贡献;揭示了人口红利即将消失的趋势,由此提出最大化促进就业是维持人口对经济增长正面效应的关键.     

Population aging, health care, and growth

This paper constructs a small open two-sector (health care and non-health care) overlapping generations model and investigates how changes in the demand for health care induced by population aging influence the economy’s employment structure and per capita income growth rate. We show that population aging induces a shift in labor from the non-health care sector to the health care sector and lowers the per capita income growth rate. This paper also investigates public policy for child care and demonstrates the existence of an intergenerational conflict between current and future generations concerning public policy on child care.     

R. F. Harrod on Reviving the Birth Rate

Continuing below‐replacement fertility and projected declines in population size are demographic features of many European countries and Japan. They are variously met with complacent acceptance, calls for higher rates of immigration, or—often last and least—proposals for increasing the birth rate. Fertility was also low in the 1930s, and some of the policy debate from that period resonates today. In England and Wales, fertility then had been declining for half a century. Over the decade 1931–40, it averaged 1.8 children per woman—moreover, with net emigration. Worries over this situation and its likely consequences led to the setting up in 1944 of a Royal Commission on Population, charged with considering “what measures, if any, should be taken in the national interest to influence the future trend in population.” In a memorandum submitted to the Commission in that year, the economist R. F. Harrod set out a detailed proposal to encourage childbearing through a scheme of family endowments. Part of the introductory section of Harrod's submission, arguing the case for state intervention and for material rather than ‘spiritual’ measures, is reproduced below. An evident problem in offering economic incentives for childbearing is that, to induce a given behavioral change, well‐off families would require much larger incentives than the poor. Hence child endowments that aspire to effectiveness across the income distribution have to be skewed toward the upper end. Harrod argues that this is as it should be, that policy should establish neutrality between large and small family sizes, and that this is a conceptually separate issue from poverty alleviation. ‘We should seek a re‐distribution of national income favourable to the parents of larger families and the plan should be put into effect whether or not another re‐distribution as between rich and poor is proceeding at the same time.’ He remarks on the implausibility of the government's being able to ‘talk up’ fertility— thereby generating some kind of costless ideational change, a ‘spiritual aufklärung.’ Later pans of the submission not reprinted here cover the specific details of the proposal. The proposed annual benefit per child (intended for every child after the second, with half‐rates payable for the second child) is paid for 18 years. It is substantial and increases with the child's age—at ages 13–18, for most of the income range it amounts to 20–30 percent of the father's income (or mother's, if hers is higher). Harrod also discusses further the rationale for making the endowments (and the compulsory contributions—a flat 5 percent of income—that finance them) proportional to income. To make his case Harrod draws on the dysgenic and population‐quality arguments popular at the time: worry about ‘race decline’ and ‘a general lowering of standards and of efficiency if the parents who are best equipped in experience, knowledge and culture are relatively infertile.’ In the event, the Commission recommended a flat schedule of family allowances, together with tax exemptions for dependent children calculated to provide some income‐based benefit. These were justified on population as well as equity and welfare grounds, ‘since the handicaps of parenthood have played a large part in the fall of average family size below replacement level.‘ Population quality issues—the subject of several other submissions—were sidestepped by calling for further research. By the time the Commission's report was finally published, in 1949, the baby boom was well underway: average fertility over 1946–50 was 2.4. Roy Forbes Harrod (1900–78) was one of the foremost economists of his day. His career was largely spent at Christ Church College, Oxford. A student and sometime colleague of Keynes, his best‐known early work was centered on identifying a dynamic equilibrium growth path for the economy—building on Keynes's static equilibrium analysis. As stylized (by others), this came to be called the Harrod‐Domar growth model, a formulation basic to growth theory. Harrod was editor of the Economic Journal for the period 1945–66. He was active in politics and as an economic adviser to both Labour and Conservative governments. He was knighted in 1959. The extract is reprinted from volume 5 of the Papers of the Royal Commission on Population (London: His Majesty's Stationery Office, 1950), pp. 80–85.     

Macro‐demographic effects of the transition to adulthood: Multistate stable population theory and an application to Italy

We exploit a multistate generalisation of a classical, one‐sex, stable population model to evaluate structural and long‐term effects of changes in the attainment of adulthood. The demographic framework that inspired this paper is provided by Italy, where a strong delay in the transition to adulthood and union formation has been observed over the last several decades. Italy has also experienced very low fertility levels, and the subsequent ageing problems have become of primary concern. We first discuss a theoretical framework based on the model developed by Inaba (1995) and then include the process of transition to adulthood. We consider explicitly some specifications of the general model, and we present two distinct empirical applications, one using macrosimulation and the other one using a linear approximation. Our principal aim is to evaluate the impact of the delay in the attainment of adulthood on reproduction and on the age structure of the population.     

Child mortality and fertility: public vs private education

How does the effect of child mortality reductions on fertility and education vary across educational systems? To answer this question, we develop an overlapping-generations model where altruistic parents care about both the number and human capital of their surviving children. We find that, under a private education system, if income is low initially, the economy converges to a Malthusian stagnation steady state. For a high level of initial income, the economy reaches a growth path in which children’s education rises and fertility decreases with income. In the growth regime under private education, exogenous shocks that lower child mortality are detrimental for growth: fertility increases and education declines. In contrast, under a public education system, the stagnation steady state does not exist, and health improvement shocks are no longer detrimental for growth. We therefore offer a new rationale for the introduction of public education.     

中国人口转变道路的探索和选择

从1949年到1978年,中国在进行社会主义道路探索的同时也在进行着对中国人口转变道路的探索。建国初期,通过开展群众卫生运动,死亡率迅速下降,开启了中国人口转变的进程。20世纪50年代,初次面对人口快速增长问题,中国提出了"实现有计划的生育"的理论和构想,人口转变的中国道路开始孕育。经历了"大跃进"时期的思想动摇、工作停滞和此后的人口继续快速增长等种种波折之后,人们在人口与社会经济矛盾激增的过程中明确了中国人口转变道路的方向。最后,在"文革"期间,脆弱的国民经济和日益增长的人口压力迫使中国选择了一条主动控制人口过快增长、实行计划生育的人口转变道路。这条道路是由时代发展特征和中国的特殊国情共同决定的。     

Exploration and Establishment of the Chinese Model of Demographic Transition

Exploration of Chinese paths of socialist construction and demographic transition paralleled each other from 1949 to 1978.Mortality rate decreased rapidly during the early 1950s as a result of the public health campaign,which initiated the process of demographic transition in China.Countering the problem of rapid population growth in 1950s,China put forward the theory and the concept of "realizing planned childbearing",and the Chinese model of demographic transition was brewing.Orientation of the Chinese path of demographic transition was reinforced in the 1960s in the context of intensifying contradiction between population and socio-economic development.Finally,China launched the demographic transition by vigorously implementing population control and family planning in the 1970s in the midst of "Cultural Revolution" when the rapidly increasing size of population exerted great pressure on economic development.The Chinese path of demographic transition is determined by the changing characteristics of the times and China’s special national conditions.     

Bridewealth and Birth Control: Low Fertility in the Indonesian Archipelago, 1500–1900

Before the onset of the present demographic transition, population growth in Indonesia had reached unprecedentedly high levels. This article demonstrates that such high levels were a recent phenomenon. Prior to 1900 rates of natural population increase were low to very low in most areas in Indonesia. This runs counter to expectations based on Hajnal's “Eastern marriage pattern,” which could imply high growth levels in extended family areas, such as most Indonesian regions outside Java in the past. Usually, the low population growth rates in Southeast Asia are attributed to high mortality owing to high levels of violent conflict. It is argued that other factors contributing to such high levels of mortality should receive more attention. In this article it is also argued that low fertility rates, too, played a role in generating low rates of natural increase. The article discusses the influence of marriage patterns, household structure, methods of birth control, adoption, and slavery on fertility.