The biocultural origins of human capital formation and economic growth

Oded Galor, Marc Klemp

04 October 2014

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The transition from an epoch of stagnation to an era of sustained economic growth has triggered one of the most significant transformations in the course of human history. While living standards stagnated for millennia before the Industrial Revolution, income per capita has seen an unprecedented twelvefold increase over the past two centuries. This has profoundly altered the level and distribution of education, health, and wealth across the globe (Maddison 2001).

Over most of human existence the forces of natural selection shaped the composition of the population. Lineages whose traits were complementary to the economic environment generated higher income and thus higher reproductive success. The gradual propagation of growth-enhancing traits has presumably contributed to development and the take-off from stagnation. In particular, it is hypothesized that during the epoch of stagnation, natural selection increased representation of traits associated with predisposition to offspring quality. This evolutionary process fostered human capital formation and contributed to the reinforcing interaction between investment in human capital and the technological progress that triggered demographic transition and sustained growth (Galor 2011, Galor and Moav 2002).

Moderate fecundity and long-run reproductive success

Our recent research explores the biocultural origins of human capital formation and economic growth (Galor and Klemp 2014). It presents the first evidence that moderate fecundity (and thus predisposition towards investment in child quality) was conducive to long-run reproductive success within the human species. It further suggests that individuals with lower than median levels of fecundity enjoyed an evolutionary advantage in the pre-demographic transition era. These findings lend credence to the hypothesis that during the epoch of stagnation, natural selection favoured those with lower fecundity and larger predisposition towards child quality, contributing to human capital formation, demographic transition, and growth.

Evidence from extensive genealogy of half a million individuals in Quebec

Using an extensive genealogical record for nearly half a million individuals in Quebec between the 16th and the 18th centuries, we examine the effect of fecundity on number of descendants in the subsequent four generations for early inhabitants of the Canadian province. In light pre-industrial Quebec’s social norm observed in which marriage marked the intention to conceive (Figure 1), the research exploits variation in the random component of the time interval between the date of first marriage and the first birth in order to capture the effect of fecundity on fitness.

Figure 1. Distribution of time to first birth in Quebec (1572-1799)

The histogram depicts the durations (in weeks) from first marriages to first births of 53,154 mothers in Quebec between the 16th and the end of the 18th century who gave birth between the 7th and 728th day of their marriage.

The research mitigates hurdles in the identification of the effect of fertility on long-run reproductive success by focusing on the effect of fecundity, rather than fertility. Furthermore, it designs an empirical strategy that exploits the inherent uncertainty in the process of human reproduction for identification. Since fecundity reflects genetic and socio-environmental factors, the time interval between the date of first marriage and first birth is affected by genetic predisposition, socio-environmental conditions, and the realization of random elements that affect conception. Accounting for a range of genetic and socio-environmental confounding factors that may affect reproductive success, the timing of first birth, and the quality of offspring, the study attempts to isolate the effect of the random variations in time from marriage to first birth across individuals. In particular, genetic, as well as cultural and socio-economic factors that may affect fecundity are accounted for by the inclusion of maternal founder fixed effects. We identify the effect of fecundity on reproductive success based on variations in reproductive success among siblings, capturing the similarities in the genetic predisposition of these genetically linked individuals, as well as their cultural and socio-economic proximity.

Findings

The research establishes that while higher fecundity leads to a larger number of children, an intermediate level of fecundity predicts long-run reproductive success. Maximal reproductive success is attained by couples with moderate fecundity (whose first delivery occurred 65 weeks after their marriage, in comparison to a sample median of 53 weeks). In line with the conventional wisdom, panel A shows that higher fecundity (i.e., shorter time to first birth) led to a larger number of children. Nevertheless, intermediate fecundity maximized long-run reproductive success. In particular, panel B depicts a hump-shaped relationship between fecundity of heads of lineages and their number of grandchildren. The maximum predicted number of grandchildren is 48, associated with a moderate level of fecundity. Similarly, panels C and D reveal hump-shaped relationships between the fecundity of heads of lineages and their great-grandchildren and great-great-grandchildren. The optimal level of fecundity is associated with 194 great-grandchildren and 306 great-great-grandchildren. In light of the heritability of fecundity, the finding that the optimal level of fecundity is below the population median suggests that in pre-industrial Quebec, the representation of individuals with lower levels of fecundity, and thus higher pre-disposition towards child quality, has gradually increased in the population.

Figure 2. Fecundity and the number of descendants in subsequent generations

Note: Predicted number of descendants with 90% confidence interval as a function of time from marriage to first birth based on restricted cubic splines for 3,798 heads of lineages.

Fecundity, child quality and long-run reproductive success

We identify several mechanisms contributing to the trade-off associated with higher fecundity and to the hump-shaped effect of fecundity on long-run reproductive success. While individuals with lower fecundity had fewer children, the observed hump-shaped effect of fecundity on long-run reproductive success reflects the adverse effect of fecundity on the quality of each child. In particular, individuals with lower fecundity were more likely to have children that:

  • survived and got married,
  • married at an earlier age, and
  • were educated.

Thus, despite the positive effect of fecundity on the number of children, the adverse effect of fecundity on child quality and child reproductive success generated the observed hump-shaped relationship between fecundity and long-run reproductive success.

Implication for human capital formation and the transition to modern growth

The evidence from pre-industrial Quebec suggests that natural selection favoured individuals characterized by moderate fecundity, increasing the population's predisposition towards investment in child quality. Interestingly, the conditions faced by the founding population of Quebec during this high-fertility time period resemble the environment that anatomically modern humans confronted during their migration out of Africa, as they settled new territories where the carrying capacity of the new environment was an order of magnitude greater than  the size of the founder population. The findings support the hypothesis that during the epoch of stagnation, natural selection favoured individuals with a larger predisposition towards child quality, contributing to human capital formation, the onset of the demographic transition, and the evolution towards sustained economic growth.

References

Galor, O (2011) Unified Growth Theory, Princeton: Princeton University Press.

Galor, O and M Klemp (2014) “The Biocultural Origins of Human Capital Formation,” CEPR Discussion Paper, 10136.

Galor, O and O Moav (2002) “Natural selection and the origin of economic growth,” Quarterly Journal of Economics, 117, 1133–1191.

Maddison, A (2001) The World Economy: A Millennial Perspective, OECD, Paris.

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Topics:  Development Economic history

Tags:  Quantity vs quality, Malthusian trap, sustained growth, epoch of stagnation, fecundity, fertility, child quality

Professor of Economics at Brown University and Fellow of the Department of Economics at the Hebrew University of Jerusalem. CEPR Research Fellow

Visiting Assistant Professor, Brown University; Postdoctoral Researcher, University of Copenhagen

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