Geography, Demography, and Early Development

University of Colorado Working Paper No. 01-8

47 Pages Posted: 24 Aug 2001

See all articles by Murat Iyigun

Murat Iyigun

University of Colorado at Boulder - Department of Economics; Harvard University - Center for International Development (CID); IZA Institute of Labor Economics

Date Written: August 2001

Abstract

This paper presents a growth model where survival is endogenously determined and the abundance of natural resources affects the returns to labor. In geographic regions where natural resources are initially more abundant and the climate is relatively more hospitable, survival odds are higher. Higher life expectancy prompts parents to devote more of their resources to old-age consumption and enjoyment. Consequently, they invest relatively more in the quantity and quality of their offspring. Investment in education, together with population growth, eventually triggers technological progress. As the level of technology improves and life expectancy rises along with it, a geographically advantageous economy enters a post-Malthusian regime during which both fertility and educational attainment increase. Eventually, the rising returns to education leads such an economy to a demographic transition during which life expectancy continues to rise and parents have fewer but more educated children. In regions where geography is more adverse, this transition does not take place and economies remain trapped in the Malthusian regime. Accounting for the role of geography in development, therefore, helps to link demographic transition to geography and shows that geography affects the economy mostly indirectly through its impact on households' economic decisions and demographics. It also provides a framework with which to assess why geography may matter less today.

Keywords: Demographic Transition, Geography, Institutions, Growth

JEL Classification: J13, O11, O33, O40

Suggested Citation

Iyigun, Murat F., Geography, Demography, and Early Development (August 2001). University of Colorado Working Paper No. 01-8, Available at SSRN: https://ssrn.com/abstract=280914 or http://dx.doi.org/10.2139/ssrn.280914

Murat F. Iyigun (Contact Author)

University of Colorado at Boulder - Department of Economics ( email )

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Harvard University - Center for International Development (CID) ( email )

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IZA Institute of Labor Economics

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