Urbanization, long-run growth, and the demographic transition

Abstract Advanced economies undergo three transitions during their development: (1) transition from a rural to an urban economy, (2) low-income growth high-income growth, (3) high fertility and mortality rates low modern levels. The timings of these are correlated in the historical development most advanced economies. I consider nonlinear model endogenous long-run economic demographic change, which child quantity-quality substitution is driven by declining mortality. Because captures interactions between all transitions, it able explain additional empirical patterns: urban-rural wage gap, rural-urban family size ratio, surprisingly, that early urbanization slows development. This third prediction distinguishes other theories document evidence for cross-country data.