3 minute read
Theory suggests the sustained transition from agriculture to manufacturing in the 19th and 20th centuries explains much of the decline in birth rates (fertility) observed during this time period. Empirically demonstrating this has proven difficult, however.
Work from ANU College of Business and Economics’ Professor Markus Brueckner uses the shock to agricultural earning opportunities caused by the boll weevil plague in the US cotton belt to provide much-needed evidence in this regard.
The boll weevil plague in the US South negatively affected average income in cotton-dependent counties.
Most interestingly, the plague prompted changes in the labor market. Some households remained in agricultural employment (stayer households) while others shifted to manufacturing work (switcher households).
“Stayer households reduced fertility as they experienced income losses, while switcher households reduced fertility because manufacturing work is generally less compatible with raising children than is agricultural work,” Brueckner said.
Reduced earning opportunities in the agricultural sector decreased fertility.
Due to the reallocation of labor from agriculture to manufacturing, there was an increase in how much parents invested in children on average.
“The rising costs of child rearing induced parents to spend more on educating the (fewer) children that they chose to have,” Brueckner noted.
The paper provides an explanation for the well-documented increase in school enrolment that accompanied the shift from agriculture to manufacturing and reduced fertility rates in the 19th and 20th century. The paper will soon be published in the Review of Economics and Statistics.
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