Rural exodus and fertility at the time of industrialization

Robert Stelter, Max-Planck Institute for Demographic Research
Thomas Baudin, Université Catholique de Louvain

Grounding on the literature in demographic and economic history, we develop a model of endogenous growth making the rural exodus a pre-requirement for human capital accumulation and sustained economic growth. Differential mortality as well as asymmetric technological progress between cities and countryside pull and push people from the countryside. We calibrate our model to fit the dynamics of fertility, urbanisation and production both in cities and countryside in Sweden and Denmark from 1760 to 1960. We show that mortality stalls in cities may have delayed both the demographic transition and industrialisation. Finally, we quantify the potential economic loss of policies limiting the rural exodus as those implemented in China during the last decades.