On a demographic consequence of the First World War

Super column by Guillaume Vandenbroucke. It is connected to the work on linking institutions with supply of labor by Elena Nikolova . In that work, Nikolova  showed inclusive instis are more likely to emerge when we have shortage of labour. One of the example was world wars where economies like US allowed voting for women to incentivise women as supply of men has decreased post World Wars.

This column by Vandenbroucke goes a step back and shows how labor force has declined post WWI. This was because of decline in fertility. The fertility in turn declines because of expectations over loss in income and productivity. He actually makes a model factoring these expectations and shows it resembles the actual trend fairly closely.

The First World War ravaged Europe to an extent that had not been seen until then. Half of its demographic impact is accounted for by the collapse of fertility during the war. But why did such a collapse even occur? In a recent paper (Vandenbroucke 2012) I argue that this was the optimal reaction of rational, forward-looking individuals facing a shock to their expectations. Contrary to the conventional view, I argue that this shock was enough to account for the data even when abstracting from the physical separation of couples during the war.

The case of the First World War was not unique. Caldwell (2004) shows that fertility declined in 13 different episodes of crises such as wars and revolution in various countries and periods of time.




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