Land ownership, the subsistence constraint, and the demographic transition

We develop a novel model of fertility choice predicting an increase and subsequent decrease in fertility levels without introducing a quality–quantity tradeoff, mortality changes, or urbanization. The model highlights the roles of a subsistence constraint and non-wage income deriving from the ownership of land. We show that the sign of the effect of the wage rate on fertility depends on whether non-wage income is greater or less than a minimum consumption level. Suggestive evidence supporting the model, on changes in fertility from 1851 to 1891 across French départements , is provided. Finally, we embed our static model in a model of endogenous growth, and provide a numerical illustration of the working of the model.