Human capital, technological progress and the demographic transition
Mathematical Population Studies, 7:4, 343–363 (2000)
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 et 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.