The Biocultural Origins of Human Capital Formation and Economic Growth

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By Oded Galor, Professor of Economics at Brown University and Fellow of the Department of Economics at the Hebrew University of Jerusalem. CEPR Research Fellow, and Marc Klemp, Visiting Assistant Professor, Brown University; Postdoctoral Researcher, University of Copenhagen. Originally published at VoxEU.

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)

galor fig1 2 oct

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

galor fig2 2 oct

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 f 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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About Lambert Strether

Readers, I have had a correspondent characterize my views as realistic cynical. Let me briefly explain them. I believe in universal programs that provide concrete material benefits, especially to the working class. Medicare for All is the prime example, but tuition-free college and a Post Office Bank also fall under this heading. So do a Jobs Guarantee and a Debt Jubilee. Clearly, neither liberal Democrats nor conservative Republicans can deliver on such programs, because the two are different flavors of neoliberalism (“Because markets”). I don’t much care about the “ism” that delivers the benefits, although whichever one does have to put common humanity first, as opposed to markets. Could be a second FDR saving capitalism, democratic socialism leashing and collaring it, or communism razing it. I don’t much care, as long as the benefits are delivered. To me, the key issue — and this is why Medicare for All is always first with me — is the tens of thousands of excess “deaths from despair,” as described by the Case-Deaton study, and other recent studies. That enormous body count makes Medicare for All, at the very least, a moral and strategic imperative. And that level of suffering and organic damage makes the concerns of identity politics — even the worthy fight to help the refugees Bush, Obama, and Clinton’s wars created — bright shiny objects by comparison. Hence my frustration with the news flow — currently in my view the swirling intersection of two, separate Shock Doctrine campaigns, one by the Administration, and the other by out-of-power liberals and their allies in the State and in the press — a news flow that constantly forces me to focus on matters that I regard as of secondary importance to the excess deaths. What kind of political economy is it that halts or even reverses the increases in life expectancy that civilized societies have achieved? I am also very hopeful that the continuing destruction of both party establishments will open the space for voices supporting programs similar to those I have listed; let’s call such voices “the left.” Volatility creates opportunity, especially if the Democrat establishment, which puts markets first and opposes all such programs, isn’t allowed to get back into the saddle. Eyes on the prize! I love the tactical level, and secretly love even the horse race, since I’ve been blogging about it daily for fourteen years, but everything I write has this perspective at the back of it.

25 comments

  1. James Levy

    This is weird, magical thinking. How can the author know why the moderate fecundity took place, and that this led ipso facto to those parents investing greater resources in their moderately fecund brood? Might their Goldilocks fertility simply be an average of live births for a given population?

    Those children would have had to endure the hardscrabble life of colonial Quebec. If there was any evolutionary pressure on them, it was to be tough, stoical, and practical, accepting their lot and getting on with the drudgery of nursing crops to harvest and cutting and splitting enough wood to stay alive in the winter. It would not have been pressure to invent steam engines and power looms (which, of course, these Quebecois did not invent). In such a marginal environment the pressure, in fact, is against innovation, because if anything goes awry, you are likely not to survive. The application of Evolutionary principles to this question seems a total failure.

    1. just bill

      It depends on what you mean by failure. These guys were getting paid the whole time and they found someone to publish the paper. They didn’t have to lie or avoid stepping on powerful toes, which in economics is damn near impossible. They used some neat math which is incomprehensible to 90+% of the population, and they mentioned Darwin which makes it scientific.

      Next week some talk show host will prove it makes sense to avoid having children if you can’t afford them, which will justify some politician’s claim that helping the poor only hurts their chances for economic success.

  2. trish

    sure, no doubt investment in child quality vs quantity lead to long-run reproductive success, but
    natural selection favored those with “traits complementary to the economic environment” and “economic growth?”
    I don’t know, but this strikes me as a simplistic response when it comes to humans ( “human capital”). Surely other important variables?

    1. buster

      Now that’s what I call brilliant economic analysis, based on solid data – as long as we ignore the fact that there was no permanent European population in Quebec until 1608 when it had a settled population of 28.

    2. Michael

      What appears simplistic to you? In my eyes the hypothesized effect of natural selection on economic growth is in fact very plausible. As the authors state in their paper: “Over most of human existence, the process of development was marked by Malthusian stagnation. The Malthusian pressure has governed the evolution of the size of the population, and conceivably, via the forces of natural selection, has shaped the composition of the population as well. Lineages of individuals whose traits were complementary to the economic environment generated higher income, and thus higher reproductive success. The gradual increase in the representation of these growth-enhancing traits in the population presumably has contributed to the process of development and the take-off from stagnation to growth.”

  3. efschumacher

    Only if you believe that monogamy and private property are immutable traits of human nature, rather than consequences of the development of agriculture. See “Sex at Dawn” by Christopher Ryan and Cacilda Jetha for the full and racy exposition.

  4. Ulysses

    I tried hard, and failed, to see any sort of interesting argument being advanced here. The one point that leapt out at me is that the author attempts to establish the importance of this study through a wild, completely unsubstantiated assertion:
    “the conditions faced by the f [rench] (sic) 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.”

    Why bother going to all the trouble of doing actual archaeological, and anthropological research on the particular conditions of life among prehistoric peoples millions of years ago? That’s so old fashioned! I expect huge royalties from my upcoming book on baroque Rome, which “resembles” present day Hoboken, New Jersey in some important respects. This way I save the cost of a plane ticket,, and merely have to ride the PATH train, interview a few locals, and my work is done!

    1. nony mouse

      hubristic nonsense. encountering the New World, which was already being exploited by indigenous tribes is not equivalent to human spread out of Africa into areas never populated by homo sapiens. some sick euro-centric, imperialistic bs they’re hyping there.

      this article is so strange, I don’t even bother to read their data except to get the gist that focusing on quality childrearing is an advantageous strategy for survival of one’s genes, which almost seems to be common sense. since they’ve proven it with data here (and mighty questionable theory) I guess we can all stop worrying about THAT niggling little question!

    2. Lambert Strether Post author

      Hmm. It seems to me that the similarity is that of making it through a choke point, which both populations did, and the strategy that helped them do so.

      If you think that humanity might face a future choke point, then the topic might be of interest to you.

      Speaking of Rome, I’ve become (nearly) addicted to the “History of Rome” podcast, and I’m certain there are plenty of parallels between the Rome of the Roman Empire, and Hoboken. Slavery, as opposed to wage labor, is an absolute difference, but we certainly have similarities in terms of bread and circuses, a mercenary army, and so on. Not to mention “a Republic, if you can keep it.” (To be fair, I use it to go to sleep, too!) And I’m going on to the “Revolutions” one next.

      1. Ulysses

        If you’re getting into Roman stuff, I can’t recommend too highly the excellent novels of Steven Saylor– a great storyteller as well as a fine classicist.

  5. Je' Czaja

    This is an excellent example of over-simplification and tunnel vision, which I addressed in The Experts from Kerplooey-my children’s comic book on Critical Thinking for Beginning Readers. :)

  6. nony mouse

    so, wait…economy existed before gov’t and ‘economy’ as how well you exploit natural resources in order to breed, and therefore economy = biological ‘fitness’?

    sounds like a neoliberal social darwinist’s wet dream.

  7. susan the other

    This seems like a strange piece of research, comparing fecundity (sociobiological variables) rates. The conclusion that more moderate fecundity rates had the greatest success of passing on their genes over a 200 year period really seems like old information. But then I think about something we are actually facing today – the carrying capacity of the planet is maxed out. All of these studies were looking at people who emigrated from reduced resource environments to richer environments. Where they built up generations of human capital, etc. All of whom worked on the farm and some of whom became prototypes for today’s professionals. There is no way this research informs us about our human capital going forward. Except maybe this: since we are disintegrating socially we are not creating human capital. Not sure where that leaves us.

    1. Phil

      Well, in my understanding, it was never before established in any species that moderate fecundity (and moderate, as opposed to maximal, number of offspring) is associated with the maximal number of descendants.

  8. craazyman

    we’ll have to keep this research in mind when it’s time to colonize Mars

    It will certainly be tempting to forget all about it once the catatonia wears off — so put it on a CD and file it someplace it won’t get lost to history in some drawer mixed up with packets of duck sauce, paper clips and take out menus!

    1. Ulysses

      “It will certainly be tempting to forget all about it once the catatonia wears off…” I think you should offer to write the blurb for the good Herr Doktor’s next book!! Craazyman, sometimes you outdo even yourself, lol.

  9. Darren Kenworthy

    This article reminds me of specious 19th century ethnological “scholarship” aimed at justifying colonialism.

  10. Rosario

    It is obvious this is written by a tenured economics professor at an Ivy League school by recognizing how many explosive leaps of reason are made throughout. Quebec is a region with unique climate, flora, fauna, and geology. It was occupied by humans thousands of years prior to European colonization, and the aboriginal inhabitants likely colonized/displaced each other countless times prior to their arrival. How this region could represent a broader trend in human economic activity absent many other experimental environments is beyond me. Also, what of culture and the endless variables it introduces? When will they stop trying to make it a science! If this were presented within a true scientific discipline it would be panned outright. Too many variables, no adequate modelling method. Any mathematician being honest could tell them that. I’m sure Neoliberals love this nonsense. No better way to rationalize endless growth, human “capital”, and whatever else by presenting them as scientific facts.

    1. Ulysses

      Good analysis! This reminds me a bit of the pseudo-discipline of “socio-biology,” popularized by that nattering nabob of nitwittery– Edward O. Wilson. To be fair, this is actually more empirically based than a lot of the speculative dreck that is hacked up, like putrid phlegm, from the ignorant mouths of professional economists.

  11. albrt

    Did I miss the part of the study where it was demonstrated that “lower levels of fecundity” = “higher pre-disposition towards child quality”?

    Presumably the parents of only children had the very highest disposition toward child quality, but the only children “thus” became bankers and were able to have the census personnel escorted off the premises without answering questions.

    1. James

      Yes, maybe you missed it. In the “Mechanism” section of the paper ( http://ftp.iza.org/dp8433.pdf ), where the authors investigate how moderate fecundity turned out to maximize fitness, it is stated that lower fecundity “enhanced the likelihood that: (i) a child would reach the reproductive age and would have the qualities that would permit a success in the marriage market – preconditions for reproductive success, (ii) a child would have the qualities and the necessary income to be able to marry and start the process of reproduction earlier in life, and (iii) a child would become educated and thus would have higher earning capacity and reproductive success.”

Comments are closed.