IZA DP No. 8054: Land Reforms, Status and Population Growth
revised version published as 'Landowning, Status and Population Growth' in: E. Moser et al. (eds.), Dynamic Optimization in Environmental Economics, Springer Verlag, Heidelberg, 2014, 315 - 328; extended and more advanced version "Land Reforms and Population Growth" published in Portuguese Economic Journal, 2016, 15, 1-15; all versions co-authored with Ulla Lehmijoki
In this document, we consider the effects of a land reform on economic and demographic growth by a family-optimization model with sharecropping, endogenous fertility and status seeking. We show that tenant farming is the major obstacle to escaping the Malthusian trap with high fertility and low productivity. A land reform provides peasant families higher returns for their investments in land, encouraging them to increase their productivity of land rather than their family size. This decreases fertility and increases productivity in agriculture in the short and long runs. The European demographic history provides supporting evidence for this.