Chapter 5

Fewer Babies?

Was it just a matter of families having fewer babies? More generally, what role did demography play in the path to modern riches? Are controlling birth and death rates, age of marriage, and child mortality the keys to unlocking modern riches? How about life expectancy? And why do they differ across societies?

Even in the poorest parts of the world, life expectancy is higher than it was in the wealthiest parts of the world a few centuries ago. For instance, in 1703, average life expectancy in England was 38.5 years. In 2015, no country in the world had an average life expectancy less than 51 years (see the figure below). What changed? Might these changes have affected growth?

Life expectancy around the world, 2015

For most of human history, families had many children, a few of whom would make it to adulthood. These conditions led Thomas Malthus to famously conclude that this was the permanent condition of humanity. He reasoned that most people would not be able to eke out much more than a subsistence living. Malthus wrote in the late 18th century and was not wrong about the human condition up to that point in time. His ideas relating demography to economic development explain much about the pre-industrial economy. But they cannot account for the incredible transformations in the human condition that have arisen in the last two centuries.

What changed? In this chapter, we discuss the role that demography played in making some parts of the world rich. We consider the theories of Malthus and consider the extent to which the world he envisioned aptly describes the economic realities of our ancestors. Then we ask: how did some parts of the world first moderate and then escape the forces Malthus highlighted? What factors made a transition from a Malthusian world to modern growth possible? In particular, how did demographic change lead to investments in education and human capital, and how did these investments foster economic growth?

One way to test what happens in a Malthusian in world is to see what happens following a massive demographic shock. The most famous – and deadly – example of such a shock was the Black Death, which ravaged much of the world in the mid-14th century. The initial period following the pandemic was one of economic crisis. Trade collapsed and real wages fell as food was left rotting in the fields and crops were not harvested. Political elites across Europe also tried to prevent wages from rising. But economic pressures ultimately trumped the political will of the elites. In the following decades, real wages increased (see the figure at the top for the case of England). Land use also changed. Marginal lands were abandoned and landowners shifted away from arable farming (which was relatively labor-intensive) towards pastoral farming (which was more land-intensive). The most important institutional consequence of the Black Death was the demise of serfdom in Western Europe. The sharp demographic shock of the plague simply made it impossible for landlords to maintain or reinstate servile institutions and impose feudal dues on recalcitrant peasants.

What role did demographic patterns play in economic development? While we save a discussion of the "demographic transition" of the 19th century for later chapters (this transition involved a movement to lower birth and death rates), there were other important demographic differences across the world prior to industrialization. One example was the practice of late marriages. For women, teenage marriage has been common in many parts of the world since the dawn of the institution of marriage. However, in parts of late medieval Europe, women tended to marry in their mid-twenties. Hajnal (1965) labeled this practice the European Marriage Pattern. This marriage pattern, which was characteristic of most of Europe in 1900, had its origins in northwestern Europe several hundred years earlier. Common in Scandinavia, the British Isles, Low Countries, Germany, and northern France, it was less evident in Southern Europe and entirely absent in Eastern Europe. Why might this marriage pattern matter for economic growth?

Before the modern period, female age at marriage was important in determining aggregate fertility (see the figure below). Childbirth outside of marriage was rare. But birth control within marriage was not widely practiced. Since fertility within marriage remained high, aggregate fertility was significantly reduced by delayed marriages. Every two years a woman was not married reduced the number of children she had, on average, by one child. Malthusian theory therefore suggests that the European Marriage Pattern helped keep per capita incomes higher than they would have otherwise been.

Fertility and female age of marriage in England, 1590s–1830s

Two distinct claims are made on behalf of the European Marriage Pattern. The weak claim is that it played an important role in restraining fertility and hence maintaining per capita incomes in a Malthusian economy. The stronger claim is that it played a crucial role in the transition to modern economic growth. We present evidence both in favor and against each of these claims in this chapter.

We also discuss unified growth theory, put forth by Oded Galor and several co-authors. Unified growth theory accounts for two important developments: (1) the gradual increase in growth rates that occurred during the Industrial Revolution; and (2) the demographic transition of the late 19th and early 20th centuries. This theory links demographic changes to improvements in human capital and technological progress. This chapter dives into these linkages and the evidence that supports them.