1 Agricultural Development and 2 Demographic Transition and the Quantity-Quality Tradeoff Theory

Select six countries – three high-income countries and three low-income countries. For each country, find data on the employment share of agriculture; include as many years as possible. Draw two figures to show the employment share of agriculture of these countries for the time period in your sample: One figure for data of the three high-income countries, and the other for the three low-income countries. Label each curve clearly. (2 marks)

For the same six countries as in Part (a), find data on agriculture value added per worker (i.e., labor productivity in agriculture); include as many years as possible. Draw two figures to show the agriculture value added per worker of these countries for the time period in your sample: one figure for data of the three high-income countries, and the other for the three low-income countries. Label each curve clearly. (2 marks)

Compare the agricultural employment share and agricultural labor productivity, both the level and the trend, between the two groups of countries in Part (a) and (b) (i.e., high-income vs. low-income countries). What can you tell about the differences? (2 marks)

One theory explains the low agricultural labor productivity in low-income countries with high transport cost (Gollin and Rogerson, 2014). Use a 2-region – 2-sector economy model to explain why high transport costs may lower labor productivity. (2 marks)

Part (a):

Download data from the World Bank website following the link: https://data.worldbank.org. Search “Employment in agriculture (% of total employment)” (for Part a) and “Agriculture, forestry, and fishing, value added per worker” (for Part

b). In the new window that appears, under “Download”, click “CSV” or “EXCEL” to download the data.

Draw the figures as required using Excel. Use the horizontal axis to indicate the year and the vertical axis for the variables of interest. For each figure, add a legend to show which country each curve represents.

Demographic Transition and the Quantity-Quality Tradeoff Theory (7 marks)

What are the three eras regarding the history of human population growth, and what are the characteristics of each era? According to Galor and Weil (2000), what are the major economic forces that drive the transition from a Malthusian economy to a modern growth economy? (2 marks)

Choose five high-income countries and five low-income countries. For each country, find data on average years of schooling and the total fertility rate (TFR) in year 2015. (3 marks)

What differences can you tell between high- and low-income countries regarding education level and fertility rates from Part (b)? Use Quantity-Quality Tradeoff theory to explain the differences. (2 marks)

Part (b):

Download education data (average years of schooling) from Barro-Lee dataset: http://www.barrolee.com. Click “Barro-Lee Data (1950-2015)” under “2021 September Update: Barro-Lee Estimates of Educational Attainment for the Population Aged 15-64 from 1950 to 2015”, which is the most updated data. On the new webpage that appears, go to “Education Attainment for Population Aged 25–64” and download the excel file under “Total population”.

Pick the data for five high-income and five low-income countries in 2015 as asked.

Download fertility rate data from the World Bank website: https://data.worldbank.org. Search “Fertility rate, total (births per woman)”. Download the excel file of data and choose the same ten countries as in Step 1.

Present your data in a table as below (add rows as needed):

high-income countries low-income countries

country yrs of schooling TFR country yrs of schooling TFR