18. juni 2018

Fecundity, Fertility, and the Formation of Human Capital

New insights suggest there was a trade‐off between child quantity and quality in England during the industrial revolution, supporting leading theories of the origins of modern economic growth.

Exploiting a genealogy of English individuals living in the 16th to the 19th centuries, Marc Klemp and Jacob Weisdorf show that lower parental reproductive capacity positively affected the socio‐economic achievements of offsprings.

The authors find that parental fecundity positively affected the number of siblings and that children of parents with lower fecundity were more likely to become literate and employed in skilled and high‐income professions.

The human capital of offspring

Falling fertility rates and rising levels of human capital are central features of the centuries‐long historical transition from economic stagnation to modern economic growth. Long‐run growth theories have placed the trade‐off between child quantity and child quality at the heart of this transition, arguing that technological progress incentivised parents to increase investment in their children's human capital by giving birth to fewer children (Galor and Weil, 2000; Galor, 2011). Studies based on contemporary populations and inventive empirical strategies have generally not found clear‐cut empirical support for this idea. The absence of strong evidence among modern populations could mean that the quality–quantity trade‐off is negligible, or that it is inoperative in, for example, the presence of a welfare state.

In the article Fecundity, Fertility and The Formation of Human Capital published in the Economic Journal, Klemp and Weidorf investigate the effect of parental fecundity (i.e. reproductive capacity) on the human capital of offspring. They develop a new empirical strategy, in which family size is instrumented by parental fecundity, and investigate the existence of a quantity–quality trade‐off. England is a good setting for such an analysis.

The costs of education were primarily borne by parents rather than the state, and family size varied more than in modern populations. Using a well‐known individual‐level genealogy, the Cambridge Group's family reconstitution data described in Wrigley et al. (1997), Klemp and Weisdorf first establish a negative effect of parental fecundity on offspring human capital and then present evidence in favour of a significant child quantity–quality trade‐off.

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