The agricultural basis of comparative development

Abstract

This article shows, in a two-sector Malthusian model of endogenous population growth, that output per capita, population density, and industrialization depend upon the labor intensity of agricultural production. Because the diminishing returns to labor are less pronounced, high labor intensity (as in rice production) leads not only to a larger population density but also to lower output per capita and a larger share of labor in agriculture. Agronomic and historical evidence confirm that there are distinct, inherent differences between rice and wheat production. A calibration of the model shows that a relatively small difference in labor intensity in agriculture can account for a large portion of the observed differences in industrialization, output per capita, and labor productivity between Asia and Europe prior to the Industrial Revolution. Significantly, these differences can be explained even though sector-level total factor productivity levels and the efficiency of factor markets are held constant in the two regions.

The Agricultural Origins of Time Preference

“…This section develops a dynamic model that captures the evolution of time preference during the agricultural stage of development – a Malthusian era in which individuals that generated more resources had larger reproductive success (Ashraf and Galor, 2011; Dalgaard and Strulik, 2015; Vollrath, 2011). The evolution of time preference is based on four elements: occupational choice, learning, reproductive success, and intergenerational transmission.…”

No Mangoes in the Tundra: Spatial Heterogeneity in Agricultural Productivity Analysis*

“…His results – focused on the labour coefficient – highlight considerable technology heterogeneity across continents, climate zones and country groups. Note that with the exception of Gutierrez and Gutierrez (2003) and Vollrath (2009b), this literature largely sidesteps concerns over variable endogeneity and the bias induced.…”

The Agricultural Origins of Time Preference

“…In the first period of life -childhood -agents are economically passive and their consumption is provided by their parents. In the second and third periods of life, individuals have access to identical land-intensive production technologies that allow them to 4 See Ashraf and Galor (2011), Dalgaard and Strulik (2013) and Vollrath (2011). generate income by hunting, fishing, herding, and land cultivation. Some of the available modes of production require investment (e.g., planting) and delayed consumption, and thus, in the absence of financial markets, individuals' choices regarding their preferred mode of production reflect their rate of time preference.…”