Working Paper: NBER ID: w23547
Authors: Robert E. Lucas Jr.
Abstract: At some point in the first half of the 19th century per capita GDP in the United Kingdom and the United States began to grow at something like one to two percent per year and have continued to do so up to the present. Now incomes in many economies routinely grow at 2 percent per year and some grow at much higher “catch-up” rates. These events surely represent a historical watershed, separating a traditional world in which incomes of ordinary working people remained low and fairly stable over the centuries from a modern world where incomes increase for every new generation. This paper uses Gary Becker’s theory of a “quantity/quality trade-off,” consistent both with Malthusian population dynamics (quantity) and with demographic transition (quality), to identify a limited set of forces that were central to this revolution.
Keywords: No keywords provided
JEL Codes: N00; O11; O40
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| economic growth (O49) | fertility decisions (J13) |
| fertility decisions (J13) | human capital investment (J24) |
| economic growth (O49) | human capital investment (J24) |
| fertility decisions (J13) | demographic transition (J11) |
| economic conditions (E66) | fertility decisions (J13) |
| migration (F22) | economic development (O29) |