INEQUALITY FUELS POPULATION GROWTH: New cross-national evidence 1870-2000

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Date:
30 Mar 2016

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Growing inequality and overpopulation are not unrelated developments: rather, the huge differences in birth rates and population growth across countries are to a large extent driven by variations in income inequality. That is the central conclusion of new research by Marijn Bolhuis and Alexandra de Pleijt, to be presented at the Economic History Society’s 2016 annual conference in Cambridge.

Their study analyses country-level data on income inequality and birth rates from 1870 to 2000 for 67 countries. They find that the birth rate of countries with a 50% higher level of income inequality – roughly the difference between the United States and Denmark – is twice as high as that of an economically similarly developed country. The observed relationship is not just driven by differences between regions – for example, African countries typically have high levels of both inequality and fertility rates, whereas in Europe these tend to be low – but also holds within continents.

Of course, correlation does not necessarily imply causation. The famous French economist Thomas Piketty, for example, has argued that today’s growing inequality is probably partly a result of low birth rates. Fewer children per couple lead to greater inheritances per child, which often translates into increased income inequality.

To argue that the relationship between inequality and birth rates runs two ways, Bolhuis and De Pleijt examine cross-country differences in income inequality that are most certainly not caused by fertility rates.

For example, some of the variation in inequality is a result of the distribution of land that certain crops historically encouraged. Sugar cane and cotton were very labour intensive to produce, enjoying economies of scale. This explains why an unequal plantation economy based on slave labour arose in the southern American states, where the soil and climate were suited for the cultivation of such ‘inequality crops’.

In contrast, the climate of the northern American states lent itself to commodities grown on family farms, which promoted the growth of a middle class.

The two key principles that best explain why people have more children in the more unequal parts of the world are the quality-quantity trade-off and infant mortality. Earlier studies have found that parents tend to aim for offspring that can provide support later in life, especially in developing countries. In Western Europe, the quality-quantity trade-off is such that having fewer children would mean that the remaining children are of ‘better quality’, that is, having enjoyed more resources.

But if increasing the quantity does not mean that the ‘quality’ of a child decreases, because parents already lack access to resources like education and health care, quantity seems like the better bet.

Survival rates also play an important role in this trade-off: if infant mortality is high, parents tend to have more children, to ensure that enough will still be around later on. Since educational attainment and infant survival rates are lower in more unequal countries, Bolhuis and De Pleijt argue that the related shift towards ‘quantity’ explains the strong link between inequality and birth rates.

Marijn Bolhuis comments:

‘Our results indicate that economic inequality may fuel population growth, especially in countries without universal access to health care and education. In the long run, high birth rates make it harder for countries to escape poverty, as economic growth has to outpace population growth in order for average income levels not to decline.’

‘Moreover, satisfying the demands of a growing population requires more and more resources from a planet that is already under enormous pressure, making inequality a significant threat to the environment as well.’ 

‘Our findings may also explain why some regions and countries have historically seen lower birth rates than others. The income distribution in Europe, for example, has always been relatively egalitarian and has probably fuelled the continent’s early demographic transition in the nineteenth century.’

‘In contrast, historically high levels of inequality in Africa may explain why that continent seems trapped in poverty, through its effect on fertility rates and the dilution of resources.’

ENDS

The Unequal Demographic Transition: Inequality as a Fundamental Driver of the Fertility Decline

Marijn Bolhuis, Utrecht School of Economics
m.a.bolhuis@uu.nl
+31615165866

Alexandra de Pleijt, London School of Economics

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