Lecture 6 - Human Evolution

Question 1

What does this model add to the Unified Growth Theory

Answer 1

The role of human capital and natural selection

beacuse of the positive association between income and fertility elites had higher reproductive success (higher fertility)

Question 2

In Human evolution what was complementary to the growth process

Answer 2

Traits were complementary as they generated more income and reproductive success for elites in the Malthusian Epoch- these traits then became more prevelant in the population and so as a result the composition of the population affected technological progress

More of these traits in the popluation, the higher the rate of technological progress, and the higher the tech progress means more of these traits will spread because the higher differential fertilty

Question 3

Why is this model not completely th same as the Unified Growth Theory

Answer 3

It exclusively focuses on the role of education and changes in the composition of the population however the scale of population does not matter anymore

Question 4

Assumption

Why does technological progress take place

Answer 4

because of education
g_t+1 = ψ(e_t) and ψ(0) = 0
with e_t the average level of education and ψ(.) increasing concave

The model relaxes the assumption that there is technological progress and innovation as long as humans exist (g(0,L_t for L_t > 0) (no education here mean no technological progress)

Question 5

What is the first Darwinian element

preferences

Answer 5

Variety in preferences over human capital which differs across individuals and intergenerational transmission of preferences

if you value human capital then your children will value human capital and if you dont’t then your children wont

Question 6

What is the second Darwinian element

Answer 6

Natural selection and human evolution: revolutionary advantage for types who have preferenes over human capital: will have highest reproduction success

the share of people who value human capital more increases over time: 15-16th century renaissance or enlightenmnet in 18th century

Question 7

Assumption

Quantity and quality types utility preferences

Answer 7

Two types of individuals in population (i = quantity, quality) with different preferences (βⁱ) ovr human capital (β^quality > β^quantity
uⁱ_t = (n_th^βi_t+1)^γ(c_t)^1-γ

However income now differs across individuals: if you have preferences for human capital you and your children will have higher human capital and as a result you will also have higher income

Question 8

What is the subsistence constraint and budget constraint

Answer 8

subsistence level is the same as in the orginial unified growth theory and budget constraint is

n_t(τ + eⁱ_t+1)y_t + c_t ≤ yⁱ_t ≡ w_thⁱ_t

In the Malthusian Epoch regardless of if you value education or not conusmption is the subsistence constraint: what you need to survive and the number of children you have is the share of your income thats left after consuming what you need to survive

Question 9

how are preferences different to orginial unified growth theory

Answer 9

They will have different preferences over how to allocate γ (quantity or to quality) and different incomes (since yⁱ_t = w_thⁱ_t)

Question 10

Proposition

What is differential fertility

Answer 10

since they value human capital differently, the quantity and quality types do not accumulate at the same rate and have different income and reproductive success

Quality types always have higher income since they are better educated

Quality types always have higher income since they are better educated and have higher human capital and therefore also have higher fertility during the Malthusian and Post-Malthusian Epoch and lower fertility during the Modern Epoch

Question 11

Utility of preferences graph

Answer 11

because quality types have higher incomes and the subsistence level is the same for everyone, additonal time is invested in having more children and more educated children

Question 12

Proposition

What is the average level of education in the economy

Answer 12

a positive function of the fraction q of quality types

Question 13

What is the composition of the population

Answer 13

The fraction q of quality types changes over time because of differential fertility

Question 14

Proposition

What is technological progress driven by

Answer 14

education, e and changes in the composition of the population, q

Overall the quality types acquire at least some education, tech progress takes place, the income of the quality types increase, they have more children (who also acquire education since they highly value human capital too), the average level of education increase

Until a point where quantity types start to invest in education too, pace of tech progress accelerates, take-off, growth is driven by average education and no long by the selective advantage of the quality type

Question 15

Technological progress and education graphs

fraction of quality type q > 0

Answer 15

At the start quality types will raise the average level of education even without technological progress, there is some technological progress but the rate is too slow for quantity types to start investing in education - at this point only quality types invest in children

Question 16

Technological progress and education graphs

increase in q in the long-run

Answer 16

as a result of the share of quality types in the population becoming so high (elites having more children), the average education curve shifts higher than technology curve

start to see the transition between stagnation to growth

Question 17

Evolution of the selective advantage and TFP growth graphs

Answer 17

1. rate of technological progress is going to slowly increase at first and is going to be driven by the differential fertility of the elites
2. at then some point its going to reach some critical threshold and then everyone can invest in education, and rate of technological progress is going to explode
3. evolutionary advantage of the elites is going to disappear in the modern epoch because they won’t have higher fertility anymore and so the share of elites/ quality types in society is going to decrease
4. but even those who do not value human capital will still invest in their education so it is okay