Download Demographic Transition: Theory and Measurement

Economics 623
Spring 2012
Prof J.R.Walker
Page 1
Economics E623: Malthus Part 2
Overview
Last time I developed the pieces of the Malthusian system. The simple relationships implicit in
Malthus’s theory describe a self–equilibrating social system, which when displaced from equilibrium by war, pestilence, or technology change, will with sufficient time return to the initial position,
bringing real wages back to their stable and therefore “natural” level. (Equilibrium wages must be
at a subsistence level, otherwise fertility increases, population grows and puts downward pressure
on real wages.)
Show effects of a major loss to the population — say from the black death. Trace out
effects of an increase in technology change using figure from Baumol.
It is this self–correcting mechanism and the colorful language (“Iron Law of Wages”, “passion
of the sexes”) that attracted widespread interest by others. The Implications of the message were
not lost on Marx and others.
Malthus argued there were two types of checks — preventive checks, (through behavioral), and
positive checks (through mortality). Pestilence, war, famine are “positive” checks, as in factual,
that serve to limit the size of population. Age at marriage was the preventive check advocated
by Malthus — individuals who not marry and start a family until they are able to provide for
their families. And of course, all should remain chaste till marriage. He did not accept birth
control, though clearly he was not thinking about the Pill, when he wrote. Abortion, infancide
were common measures of birth control, as were other traditional methods just as withdrawal. The
“passion of the sexes” made such control ineffective, and birth control sapped the moral will of the
adults to work hard and provide for their family. (Men with more children would work harder and
thus produce more.)
Thinking in terms of sapping the moral will of adults is what makes Malthus a moral philosopher and not a social science. He confuses the “is” with what should be. The two can be difficult
to disengage when reading him. John Maynard Keynes was quite charitable to Malthus as from the
Economics 623
Spring 2012
Prof J.R.Walker
Page 2
quote I gave last lecture. Ricardo and other classical economists saw production and the distribution of output to the critical problems in economics, and thought people would consume whatever
was given or acquired by them. Ricardo and others thought it impossible for all factors of production not to be fully employed. That problems of insufficient aggregate demand were impossible.
Not so Malthus. And in this regard anticipated Keynes’ General Theory of Employment and Interest Rates showing why there is unemployment, depressions and the like.
Yet in terms of his population theory, Malthus got it wrong from about the time he was writing.
Consequently, some authors are less forgiving of Malthus than is Keynes. Opinion divided on how
cognizant and knowledgeable we expect Malthus to be of the changing going on in England at the
time he wrote. For example, one population textbook author (Weeks) argues that Malthus should
have been aware of the patterns in the 1831 Census of England. (Malthus dies in 1834, so I find
this criticism harsh.) Malthus is basically correct for the 99% of human history, but got the last 1%
wrong. Of course it is the last percent that we care about.
Fallacy of Malthus The primary fallacy of the Malthusian model is the assumed constancy of
production and the importance of the diminishing returns. Malthus lived in an agricultural world,
considered land of sole importance and gave little attention to capital. Thus, for Malthus, the
production function was Yt = f (L, Nt ); land L is fixed (no time subscript) with labor Nt as the
only variable input. In actuality, the production function is Yt = ft (L, Kt , Nt ); capital inputs are
important Kt , are time-varying, and technology itself should have a time subscript to represent
technology change.
The force of technological change breaks law of diminishing returns that produces the IRON
LAW OF WAGES. Now in the absence of diminishing returns to scale wages need not decline as
population increases. Indeed, if the production technology is constant returns to scale, the size of
the population is indeterminant. However, the “limits to growth” folks and other so–called NeoMalthusians argue there is a finiteness of resources and at some point diminishing returns must set
in. The debate as we will see depends on how quickly we expect that to occur.
Economics 623
Spring 2012
Prof J.R.Walker
Page 3
Demographic Transition
Malthus’ homeostatic system of population is one great idea in population theory. The other is
the Theory of the Demographic Transition. The Demographic Transition is really two different
objects. The first is the empirical regularity described by Lee that before the transition life was
short, births were many, growth was slow and the population was young. During the transition,
first mortality and then fertility declined, causing population growth rates to first accelerate and
then to slow again, moving toward low fertility, long life and an old population. This empirical
relationship of moving from one demographic structure to another is one form of the Demographic
Transition. Everyone agrees to the existence of the empirical Demographic transition.
Indeed the notion of the Demographic Transition pervades the thinking of demographers. Notice that to Weeks, all processes are “transitions.” Documenting and characterizing the demographic transition has been a primary research activity within demography for the last 50 to 60
years.
The empirical regularity is easy to state but measurement is difficult, as there are many exceptions. As stated above, in the strict definition of the DT, mortality declines first, and that leads to
reductions in fertility. (Looser interpretations of the DT consider only the movement from a high–
fertility and high–mortality equilibrium to a low–fertility and low–mortality equilibrium, and not
whether fertility or mortality declined first.) However, this was not always the case, for France
or the United States, as in both countries fertility declines were before or coincidental with mortality declines. Thus, while the sweeping statement is true, details about each country vary and
experiences are not necessarily uniform.
These discrepancies can cause problems in the second object associated with the term “Demographic Transition” and that is the theory of the DT. What are the processes (biological and
behavioral) that lay behind the transition? Why did the transition occur when it did? Why do
countries, societies experience the transition at different times and stages of development? Why
do some countries make the transition faster than others? Countries in Western and Northern Europe took a hundred years or so to make the transition. Countries today in Asia and Latin America
make the transition 30 or 40 years. And of course, countries in Africa have yet to experience the
transition.
Economics 623
Spring 2012
Prof J.R.Walker
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As described by Weeks, early versions of the theory of the DT were theories of moderization.
Lee notes that initial declines in mortality were likely due to the reduction in contagious and
infectious diseases that are spread by air or water. Improved personal hygiene also helped, as
did improved nutrition. Nobel Laureate Robert Fogel documents that in the early phase of the
Industrial Revolution the nutritional content of diets declined and increased mortality. And early
cities were a deadly place to be with no public health measures. (Hence the spurt of death rates
in Figure 3.3 p. 90 of Weeks). Over time diets improved (via the growth in real incomes). Better
nourished people were better able to fend off disease. Public health measures were instituted
(sanitation and public water supply).
As part of the industrialization, agriculture became increasingly mechanized reducing the demand for farm laborers and thus releasing workers to seek jobs in the city. Improvements in
transportation (e.g., steam engine) allowed people to move in pursue of better opportunities. (This
is especially true for international migration to the United States, Canada and Australia.) Birth
rates as the demand for children declined. Children can be productive on the farm at an early age,
but child labor laws, compulsory schooling laws, and the physical demands of the modern factory
restricted their productivity. Children ceased being productive goods to be consumer goods (to
use a crude vocabulary). And, lowering fertility requiring changing local norms that maintain high
fertility rates to balance high mortality rates.
This is the basics elements of the theory of the DT, one of industrialization and urbanization
and the demographic adjustments made in response to the changing environment.
However, as social scientists took a closer look at the data, the general causal argument broke
down. The European Fertility Project (show summary book) discovered that the decline in fertility
occurred in widely differing social, economic and demographic conditions. Thus, economic development was seen as a sufficient condition but not a necessary one. As weeks notes, the project
uncovered examples of countries that experienced rapid fertility declines though they were not
highly urban, infant mortality rates were high, and a low proportion of the population were in industrial occupations. The conclusion of the European Fertility Project and most sociologists is that
the critical component was ideation change (change in ideas and concepts). One version labels the
change as one of secularization — an attitude of autonomy from otherworldly powers and a sense
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Spring 2012
Prof J.R.Walker
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of responsibility for one’s one–well being. (To use the definition of Weeks, p. 93).
That is to say that attitudes changed. And the common factor then accounting for DT is the
change in attitudes. Secularization and economic development and industrialization highly correlated, but do see some secularization without economic development. Many argue that secularization may be thought of as modernization of thought, distinct from a modernization of social
institutions. (Weeks p. 93.)
As you may guess, there is a consensus of opinion on the empirical facts we only disagree on
their interpretation. Is the DT driven by economic growth and development? Most economists
would probably say yes, while most sociologists would give the nod to ideation. We saw elements of this debate in the role of education and fertility decline. Increasing a woman’s education increases her market options and raises her income potential (and thus her ability to be
self–supporting). Yet, education also changes our values and attitudes. So, as I said earlier in the
semester the right answer is a mix of the two, economic change and ideational change. Eventually
both occur and interact.
I willing to give ideation credit because the economic models and approaches can not adequately explain the very low fertility in Rich Countries. And as Lee states the demographic transition continues and will not be complete until 2100. So the very low fertility of Rich Countries is
sometimes called “second fertility transition” as fertility falls far below replacement level. If economic factors are of paramount importance for the first transition (from high to low fertility) why
are they not equally important for the second transitio (from low to very low). Hence, if economic
explanations do a poor job now (explanations that work in one country do not work in another),
seems reasonable to entire that ideational change is likely part of the story.