Demographic Transition and Industrial Revolution: A Macroeconomic Investigation

All industrialized countries experienced a transition from high birth rates and stagnant standards of living to low birth rates and sustained growth in per capita income. What contributed to these transformations? Did economic and demographic changes transpire through common or distinct channels? We construct a general equilibrium model with endogenous fertility in order to quantitatively investigate the English case. We find that mortality decline significantly influences birth rates. Increased productivity has a negligible effect on birth rates but accounts for nearly all of the increase in per capita output, industrialization, urbanization, and the decline of land share in total income. The quantitative assessment of these two channels (young-age mortality and productivity) conducted in this paper sheds light on the relative importance of several theoretical mechanisms developed in this field.