Economic aspects of historical demographic change

World Bank staff working papers number 685.
Population and development series number 10.

This paper explores several related propositions about rural economic life and demographic change. A central thesis is that the shrinking of the farm labor force associated with past processes of economic development led to lower fertility. A subsidiary thesis is that this effect may no longer be essential to cause fertility decline; government population policies can substitute for it. These propositions are not meant to replace other theories about the economic-demographic transition but rather to complement and add some more detail to them.
This paper emphasizes two features of the transition in now-industrial countries: (1) the rising costs and falling benefits to parents of having many children, and (2) the link of that change to productivity growth in and structural change away from farming. Labor-saving innovations on farms lessened the benefits of children, causing the main fertility transition. Women left unpaid family labor on farms to work in offices, factories, and shops; this shift depressed fertility as jobs interfered with child care. Jobs for children were fewer in urban than in rural settings, so more children attended school, and most parents decided to have fewer but better-educated children. The Europeans thus escaped the Malthusian trap. The paper examines prospects for a similar demographic transition in low and middle income countries.
The annex describes world and regional estimates of gross and per capita product for selected dates from 1800 to 1980 and projections to the year 2000. The closing section of the annex summarizes some logical errors in the estimation of per capita product growth rates since 1950. Growth rates reported for low-income countries since 1950 probably overstate improvements in welfare or levels of living. The results underline the speculative quality of assessments of long-term changes in income and product.