Post‐Malthusian Dynamics in Pre‐Industrial Scandinavia

• Published date: 01 October 2016
• Author: Marc Klemp,Niels Framroze Møller
• Date: 01 October 2016
• DOI: http://doi.org/10.1111/sjoe.12155

Scand. J. of Economics 118(4), 841–867, 2016

DOI: 10.1111/sjoe.12155

Post-Malthusian Dynamics

in Pre-Industrial Scandinavia∗

Marc Klemp

University of Copenhagen, DK-1353 Copenhagen K, Denmark

marc.klemp@econ.ku.dk

Niels Framroze Møller

Technical University of Denmark, DK-2800 Kongens Lyngby, Denmark

nfmo@dtu.dk

Abstract

Theories of economic growth hypothesize that the transition from pre-industrial stagnation to

sustained growth is associated with a post-Malthusian phase in which technological progress

raises income and spurs population growth while offsetting diminishing returns to labor.

Evidence suggests that England was characterized by post-Malthusian dynamics preceding

the Industrial Revolution. However, given England’s special position as the forerunner of the

Industrial Revolution, it is unclear if a transitory post-Malthusian period is a general phe-

nomenon. Using data from Denmark, Norway, and Sweden, this research provides evidence

for the existence of a post-Malthusian phase in the transition from stagnation to growth in

Scandinavia.

Keywords: Demographic transition; economic growth; Malthusian stagnation; time-series

analysis; unified growth theory

JEL classification:C32; N3; O1

I. Introduction

Recent long-run economic growth theory has focused on the transition of

societies from millennia of economic stagnation to an era of sustained

economic growth (Galor, 2011). While income per capita has stagnated for

the vast part of human history, the world as a whole has experienced a

ten-fold increase in income per capita in the last two centuries, following

∗The authors are grateful to Carl-Johan Dalgaard, Karl-Gunnar Persson, Nicolai Kaarsen,

Oded Galor, and seminar participants at the Macroeconomics and the Historical Record

seminar and at the Economic History Workshop at the University of Copenhagen for useful

comments and suggestions. We are also grateful for improvements suggested by two anony-

mous referees. Furthermore, we are particularly grateful to Paul Sharp for his contributions to

an earlier version of the paper. The research of M. Klemp is funded by the Carlsberg Founda-

tion and by the Danish Research Council (reference nos 1329-00093 and 1327-00245). Part

of this research was conducted while M. Klemp was visiting the Department of Economics

and the Population Studies and Training Center at Brown University.

CThe editors of The Scandinavian Journal of Economics 2015.

842 Post-Malthusian dynamics in pre-industrial Scandinavia

the Industrial Revolution and the Demographic Transition. However, the

differential timing of this transition from stagnation to growth has led

to large differences in income across the globe. In light of the fact that

millions of people remain living in severe poverty, gaining insights into the

mechanisms that brought some countries out of stagnation and led them

into a state of sustained economic growth remains a central topic in the

field of economic growth.1

Theories building upon a Malthusian interpretation of the pre-industrial

era, such as unified growth theory (e.g. Galor and Weil, 2000; Galor, 2011),

hypothesize that technological advances in production spurred population

growth, thereby offsetting the positive effects of technology on income

per capita through decreasing marginal returns to labor. According to this

view, which interprets the pre-industrial, pre-demographic transition era as

a Malthusian era, improvements in production technology therefore led to

increases in population size, while income per capita remained stagnant.

Inspired by ideas laid forth by Smith (1776), Boserup and Kaldor (1965),

and others, unified growth theories also suggest that, in connection with in-

dustrialization, the increasing population size accelerated the technological

growth rate. This gave rise to a post-Malthusian era in which population

growth did not entirely counterbalance the growth in income. Eventually,

the population growth and associated acceleration of technological growth

gave rise to the modern growth regime, where the demand for human cap-

ital – as a consequence of the acceleration in technological development –

elevated investment in the human capital of children, resulting in a negative

association between income per capita and population growth.

First of all, this research provides time-series evidence that post-

Malthusian dynamics were operating in Scandinavia in the later part of the

pre-industrial era. Secondly, the analysis suggests that a negative associa-

tion between income and fertility eventually replaced the post-Malthusian

positive association between income and fertility. These findings are con-

sistent with the hypothesis that the evolution of societies from stagnation to

growth is characterized by a transition period of post-Malthusian dynamics.

While the vast majority of existing empirical investigations of Malthu-

sian stagnation are not directly concerned with the post-Malthusian phase

and the transition from stagnation to growth, Møller and Sharp (2014)

formulate and test a simple dynamic post-Malthusian model. Using an-

nual series of real wages, marriage rates, birth rates, and death rates for

pre-industrial England, they find evidence consistent with post-Malthusian

1The transition from stagnation to growth has been analyzed by Galor and Weil (1999,

2000), Galor and Moav (2002), Hansen and Prescott (2002), Lucas (2002), Lagerl¨

of (2003),

Doepke (2004), Galor (2005), O’Rourke et al. (2013), Strulik and Weisdorf (2008), Dalgaard

and Strulik (2010), and others. The Malthusian epoch has been analyzed separately by Clark

(2007), Weisdorf (2008), Vollrath (2011), Tabata (2013), and others.

CThe editors of The Scandinavian Journal of Economics 2015.