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on Economic Growth |
| By: | Henderson, Louis |
| Abstract: | The first country to industrialize – England – ostensibly did so without expanding investment in the basic education of its workforce. The empirical evidence underpinning this argument for England rests largely on signature rates at marriage. These are not a perfect indication of educational achievement, particularly as many children never learned to write. More problematically, I argue signatures are likely to have systematically underestimated human capital in industrial districts. In place of signature data, I propose age heaping, a measure widely understood as a proxy for numeracy but shown here to be closely related to both reading and writing abilities. In contrast to signatures, this measure suggests that ‘deskilling’ industrialization induced human capital accumulation. I argue that this occurred not because human capital was directly productive, but rather because schools provided a valuable signal. Sunday school attendance signalled low leisure-preference among child workers and were popularly attended in industrial districts. Further, such schools taught children to read but not write, which they considered inappropriate for the Sabbath, accounting for the discrepancy between these two measures of human capital. |
| Keywords: | age heaping; human capital; industrialization; labour markets; signalling; Sunday school |
| JEL: | R14 J01 |
| Date: | 2024–06–02 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:138032 |
| By: | Salvo, Carla (Sapienza University of Rome); Weisdorf, Jacob (Sapienza University of Rome, CAGE, & CEPR) |
| Abstract: | Northern Italy is markedly richer than the rest of the country. The origins of this regional divide have long been the subject of debate. We trace relative regional development back to the end of antiquity using newly assembled data on ecclesiastical building activity as a proxy for economic performance. We identify two pre-modern golden ages in the 10th to 13th and 15th to 16th centuries, both plausibly interrupted by major plague outbreaks. Our evidence suggests that the North South gap emerged more than a millennium ago, around 900 CE, when the North pulled ahead and re tained its lead thereafter. We also find that Italian unification further amplified this northern advantage. |
| Keywords: | Church building, regional development, economic growth JEL Classification: O11, N30, N60, Z12 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:cge:wacage:803 |
| By: | Valsecchi, Michele (New Economic School (NES)); Olsson, Ola (Department of Economics, School of Business, Economics and Law, Göteborg University); Kopylova, Aleksandra (New Economic School (NES)) |
| Abstract: | Cadasters are country-wide mapped land registries that increase transparency and strengthen private property rights but are often also associated with land redistribution and higher taxation. A large micro literature has studied how land reforms affect economic development within countries. We use recently developed cross-country data on cadastral institutions to investigate the empirical relationship between major reforms and social conflict. We exploit 22 major cadastral reform events during 1814-2014 that we match with countries that experienced no reform. We find a clear tendency for conflict levels and political instability to decrease one or two decades after cadastral reforms. Our findings could have relevance for policy debates among countries that have still not pursued the introduction of land registries. |
| Keywords: | cadasters; social conflict; land registry; civil war; leader changes |
| JEL: | K11 N20 O20 |
| Date: | 2026–05–15 |
| URL: | https://d.repec.org/n?u=RePEc:hhs:gunwpe:0863 |
| By: | David Roodman |
| Abstract: | Daniel Kahneman and Amos Tversky argued for challenging inside views (informed by contextual specifics) with outside views (based on historical "base rates" for certain event types). A reasonable inside view of the prospects for the global economy in this century is that growth will converge to 2.5%/year or less: population growth is expected to slow or halt by 2100; and as more countries approach the technological frontier, economic growth should slow as well. To test that view, this paper models gross world product (GWP) observed since 10, 000 BCE or earlier, in order to estimate a base distribution for changes in the growth rate as a function of the GWP level. For econometric rigor, it casts a GWP series as a sample path in a stochastic diffusion whose specification is novel yet rooted in neoclassical growth theory. After estimation, most observations fall between the 40th and 60th percentiles of predicted distributions. The fit implies that GWP explosion is all but inevitable, in a median year of 2047. The friction between inside and outside views highlights two insights. First, accelerating growth is more easily explained by theory than is constant growth. Second, the world system may be less stable than traditional growth theory and the growth record of the last two centuries suggest. |
| Date: | 2026–05 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2605.09182 |
| By: | Fernando Alvarez; Francisco J. Buera; Nicholas Trachter |
| Abstract: | We study optimal policy in a dynamic general equilibrium model where heterogeneous monopolistic competitive firms pay a fixed cost to adopt an exogenously growing frontier technology. Using Mean Field Games tools, we show that the optimal policy consists of two time-invariant subsidies: one correcting static misallocation, and one correcting the dynamic under-incentive to adopt. This holds outside of balanced growth paths, for any initial distribution of technology gaps. We analyze a version of the model that aggregates to a Neoclassical Growth Model with an S-shaped production function whenever complementarities are strong, and fully characterize when the optimal policy uniquely implements the first best. When it does not, two novel results emerge: the efficient allocation prescribes escaping a poverty trap—providing an explicit optimality foundation for a Big Push—and escaping an abundance trap, where dismantling adopted technologies is optimal. In both cases, a temporary, costless supplementary policy restores unique implementation. |
| Keywords: | production and investment; development dynamics |
| Date: | 2026–05–12 |
| URL: | https://d.repec.org/n?u=RePEc:fip:fedrwp:103233 |
| By: | Prados de la Escosura, Leandro |
| Abstract: | Recent research confirms that per capita income in early modern Spain improved onlymarginally overall, while also revealing sustained growth through much of the sixteenth and eighteenth centuries, alongside a continued decline from the late sixteenth to the midseventeenth centuries. These phases shaped Spain's relative position within Western Europe and contributed to the Reversal of Fortune. This paper finds that labour productivity, proxied by output per working-age population, improved during the first three-quarters of the sixteenth century, then declined until the mid-seventeenth century, and that thesubsequent recovery never reached the levels of the 1570s. What caused these episodes of growth and decline: changes in resource endowments or in the efficiency of their use? Phases of labour productivity growth were often driven by factor intensity, but efficiency losses underpinned periods of stagnation or decline, which contradicts the stylised view that factor intensity is the main driver of labour productivity in a pre-industrial economy. Compared with Great Britain, Spain showed an inverse, divergent pattern, moving from similar levels to less than half of Britain's by 1800. Efficiency was the main driver of the widening gap. Ingenuity appears, therefore, to be the driving force behind the Reversal of Fortune. |
| Keywords: | Output per working-age population; Dual TFP; Efficiency; Factor intensity; Reversal of Fortune; Spain; Britain |
| JEL: | J24 E24 N13 O47 |
| Date: | 2026–05–21 |
| URL: | https://d.repec.org/n?u=RePEc:cte:whrepe:50135 |
| By: | Ciccarelli , Carlo (University of Rome Tor Vergata); Marciante, Gianni (University of Bologna) |
| Abstract: | The role of womens education in driving the historical fertility transition remains poorly understood. Existing studies have focused on France, an early outlier, or on Prussia before the onset of its demographic transition. Less is known about the context where this effect is expected to be strongest: the onset of the transition in late transitioning countries. This paper fills this gap by studying the impact of womens education on fertility in Italy (1881 to 1921). Using original district level panel data, we exploit the interaction between proximity to the first female teacher training colleges opened under the Casati Law of 1859 and time fixed effects as an instrumental variable. IV estimates confirm a negative effect of education on fertility, operating through health knowledge and the economic independence that female teachers embodied. |
| Keywords: | JEL Classification: |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:cge:wacage:804 |
| By: | Kyu Yub Lee (KOREA INSTITUTE FOR INTERNATIONAL ECONOMIC POLICY (KIEP)) |
| Abstract: | This paper introduces a newly developed model that examines the interplay between trade, growth, and digital data, emphasizing data’s dual role as both a driver of growth and a source of privacy concerns. Departing from existing trade and growth models that have largely overlooked digital data’s unique characteristics, this paper provides the first comprehensive analysis of how data influences growth through data flows and knowledge diffusion, while simultaneously introducing associated privacy trade-offs.<p> A key novelty of this model lies in its clear distinction between digital data and traditional “ideas.” Both concepts share the characteristics of non-rivalry and stocklike accumulation, meaning they are cumulative and can be used by multiple entities with negligible additional cost. However, ideas are generally understood to produce only positive externalities, whereas digital data uniquely generates both positive and negative externalities simultaneously, including privacy and cybersecurity concerns for consumers.<p> The model is built within a dynamic general equilibrium framework that incorporates international trade and endogenous technological change, extending the work of Rivera-Batiz and Romer (1991) by integrating the evolution of digital data. Consumption activities, both domestic and a portion of foreign consumption, actively contribute to a country’s evolving data stock. This generated data then acts as a negative externality in the utility function of privacy-conscious consumers, reducing their welfare, even as it serves as a primary input for the R&D sector, fueling the growth engine.<p> Key findings from this new model highlight significant impacts: First, (economic growth) the model shows that unrestricted cross-border data flows are a significant stimulant for economic growth. This positive effect is further magnified by stronger knowledge spillovers and an increased number of trading partners. Conversely, stricter restrictions on data flows directly impede economic growth. The paper notes that trade liberalization alone, without the diffusion of ideas or data flows, only generates a level effect and does not affect long-term economic growth.<p> Second, (trade-off with individual welfare) another central finding is the inherent trade-off between economic growth and individual welfare. While open data flows promote economic expansion, they simultaneously intensify privacy concerns, leading to a reduction in individual welfare. This conflict is particularly pronounced in scenarios with limited or inefficient knowledge diffusion. Conversely, the model indicates that stricter data regulations, while hindering growth, can enhance individual welfare by mitigating these privacy risks. To navigate the identified trade-off between growth and privacy, the paper advocates against data localization and strongly supports the implementation of deep digital trade agreements. These agreements are proposed as crucial mechanisms to facilitate freer data flows and knowledge sharing, thereby mitigating the inherent conflict and unlocking the full potential of the digital economy. |
| Keywords: | digital data; privacy; trade; endogenous growth; welfare |
| JEL: | D33 E00 J23 O41 |
| Date: | 2025–11–07 |
| URL: | https://d.repec.org/n?u=RePEc:ris:kiepwp:022487 |
| By: | Minhyeon Jeong (KOREA INSTITUTE FOR INTERNATIONAL ECONOMIC POLICY (KIEP)); Nam Seok Kim (KOREA INSTITUTE FOR INTERNATIONAL ECONOMIC POLICY (KIEP)); Wongi Kim (Sungshin Women’s University) |
| Abstract: | This paper examines how culture influences the success of fertility-control policies. In the 1970s, many developing countries implemented birth-control measures grounded in the quality-quantity trade-off, yet their outcomes diverged, e.g., Taiwan, Thailand, and South Korea achieved rapid fertility declines, while Pakistan, India, and Brazil did not. We propose that societal conformity—the degree to which individuals adhere to norms such as a government-endorsed ideal family size— determines how effectively policy incentives translate into behavior. Using a unified theoretical framework, we show that higher conformity amplifies the impact of birth-control policies on both reducing fertility and increasing investment in children’s education. Under empirically plausible conditions, this strengthened quality-quantity trade-off not only boosts short-run economic growth but also accelerates the shift from agriculture to manufacturing—measured by manufacturing’s employment share—even when manufacturing is more capital-intensive and benefits from human-capital-driven, labor-saving technologies. Finally, we validate these predictions with cross-country empirical evidence, underscoring the pivotal role of culture in shaping demographic change and economic development. |
| Keywords: | fertility; birth policy; culture; growth; structural change |
| JEL: | E22 O16 |
| Date: | 2025–08–24 |
| URL: | https://d.repec.org/n?u=RePEc:ris:kiepwp:022486 |
| By: | Jackie Dajin Young; Marwil J. Davila-Fernandez |
| Abstract: | There has long been an apparent consensus in the literature on intra-household allocation and fertility that greater paternal involvement in childcare relaxes maternal time constraints, enabling mothers to increase their labor supply or leisure. Recent evidence, particularly from South Korea, challenges this view: increases in fathers' childcare time have coincided with a further increase in mothers' time dedicated to child-rearing. This paper develops an Overlapping Generations (OLG) growth model to address such a puzzle. The central mechanism and our main innovation hinge on the functional form of the childcare technology. When maternal and paternal time are substitutes, the conventional result holds. However, when they are complements, greater paternal involvement necessarily raises maternal childcare time, depressing fertility and redirecting household resources toward child quality. We further argue that the elasticity of substitution should not be interpreted as a pure preference parameter, as it also reflects the social and institutional norms, the skills each parent brings to child-rearing and their intergenerational transmission. The model is extended to study the effectiveness of pro-natalist subsidies, suggesting that such policies may generate an unintended anti-fertility bias. Numerical simulations calibrated loosely to South Korean data confirm that the model is consistent with the observed quantity-quality trade-off and the persistence of low fertility despite active pro-natalist policy. |
| Date: | 2026–05 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2605.13679 |
| By: | Xiao Ma; Alejandro Nakab; Daniela Vidart |
| Abstract: | How do the sources of worker learning change over the lifecycle, and how does this affect human capital and wages? Using data from Germany and the US, we document that internal learning (from coworkers) decreases with experience, while external learning (on-the-job training) follows an inverted U-shape. We develop a search model featuring multiple learning sources whose returns evolve as workers age and accumulate human capital. Quantitative results indicate that the interaction between sources is key to lifecycle wage dynamics and the effects of remote work, which disrupts internal learning and early-career wage growth, though external learning partially offsets these losses. |
| JEL: | E24 J24 |
| Date: | 2026–05 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:35199 |