EKHM30: Population and Living Standards

Assignment 1

Finland: 1750 1913

Ahmad Idrus
Kemal Burak Kaplan
Mario-Alessander Bauwens
Ricardo Meilman L. Cohn

The content

Introduction
Data
Long Term Analysis
Conclusions for Long Term Analysis
Short Term Analysis
Conclusions for Short Term Analysis
Limitations
2

Introduction
Population grew from 421,500 in 1750
to 3,035,800 in 1913 (and 5,375,276 in
2010)
Average annual rate of increase of 1.2%
Relation living standards and
demographic variables in the long and
short term
3

Data
Data span: 1750 - 1913
Source: Statistics Finland and
Reykjavik (1987)
Live births, deaths, population (31.12),
marriages(women), infant mortality, real
wage index

CBR, CDR, CMR

Growth rate, moving average, log
4

Long Term Analysis

Population and Real Wage
12

1st.
Period

3rd. Period

2nd.
Period

90.0
80.0

10
70.0

Choler
a

Wa
r

War
of
Finlan
d

Great
Famin
e

60.0
50.0
40.0
30.0
20.0

2
10.0
0

Log Population

Real wage

Figure 1: Population and 25 year centered moving average real wage

index
5

Real Wage
index

Log
Population

Long Term Analysis

Nuptiality and Fertility
11.0

50.0
45.0
40.0

9.0

CBR (per thousand)

CMR (per thousand)

10.0

35.0
8.0

30.0

7.0

25.0
20.0

6.0

15.0
5.0
10.0
4.0

5.0

3.0

CMR (MA-11)

CBR (MA-11)

Figure 2: 11 year centered moving average for both CMR and CBR
6

Long Term Analysis

Mortality and Infant Mortality
300.0

35.0

250.0

IMR (per thousand)

CDR (per thousand)

30.0

25.0
200.0
20.0
150.0
15.0
100.0
10.0
50.0

5.0

CDR (MA-11)

IMR (MA-11)

Figure 3: 11 year centered moving average both for CDR and IMR
7

Long Term Analysis

Mortality and Real Wage

CDR (per thousand)

29.0
27.0

Wa
r

War
of
Finlan
d
Choler
a

Great
Famin
e

100.0
90.0
80.0

25.0

70.0

23.0

60.0

21.0

50.0

19.0

40.0

17.0

30.0

15.0

20.0

cdr

Real Wage
index

31.0

Real Wage

Figure 4: 11 year centered moving average both for CDR and real
wage index

Long Term Analysis

Fertility and Real Wage
48.0

100.0

46.0

90.0

44.0

80.0
70.0

CBR (per
thousand)

40.0
60.0

38.0
50.0

36.0

40.0

34.0
32.0

30.0

30.0

20.0

CBR

Real Wage

Figure 5: 5 year centered moving average CBR and 11 year centered

moving average real wage index
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Real Wage
index

42.0

Long Term Analysis

Fertility and Mortality
50.0
45.0
40.0
35.0
30.0
25.0
20.0
15.0
10.0
5.0

CBR (MA-11)

CDR (MA-11)

Figure 6: 11 year centered moving average both for CBR and CDR
10

Long Term Analysis

Nuptiality and Real Wage
9.0
95.0
8.5

85.0

65.0

7.5

55.0

7.0
45.0

6.5

35.0

6.0

25.0

CMR (MA-25)

Real Wage (MA-11)

Figure 7: 25 year centered moving average CMR and 11 year

centered moving average real wage index

11

Real Wage
index

75.0

CMR (per
thousand)

8.0

Long Term Analysis

Conclusions
The period from 1750 to 1913 can be divided in 3
sub-periods with specific dynamics.
Fertility and mortality and their connection to
economic factors present a complex picture.
The period can be decomposed in two demographic
transition.
Only the first period hints to Malthusian
mechanisms, but
Historical events played an important role.
In the first period, although there is negative
correlation between mortality and real wages in the
first period, we can not establish a clear causal
relationship.
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Short-term analysis
Introduction
Econometrical analysis of main demographic
variables
Autoregressive model with 4 lags
Similar to the analyses of Lee (1981)

In the first part the whole period(1754-1911) is

analyzed.
In the next part, we divide the observations
into 3 sub-periods
1754-1810: War years
1811-1868: Cholera years and great famine
1867-1911: Modern economic growth era
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Short-term analysis
1754-1911

Lee (1981) uses prices

as the dependent
variable and his
significant variables are
L0 and L1, both<0.
As prices and wages
are negatively related,
we expect positive
coefficients; L1 is
significant and >0.
Higher real wages
encourage marriage.

Short-term analysis
1754-1911

Controlled for wages

Signs of significant
coefficients are same
with England
Yet coefficients are
much lower: aggregate
5 year effect is 0.05
(<0.30 england,
0.25<theory

Short-term analysis
1754-1911

Higher wages(lower
prices) also encourage
fertility. Our only
significant coefficient is
positive.
Our regression tells
that the positive effect
comes with 1 year lag:
9-months childbearing
effect.
Lee (1981) found
negative and significant
coefficients up to 3 lag
years.

Short-term analysis
1754-1911
During and after
mortality crisis, reduction
in baptism, empirics tell.
Several reasons are
possible.
But when controlled
for wage levels, only we
see contemporaneous
effect is negative and
significant.
Lee (1981)s
significant coefficients are
L0<0,L1<0, L2>0, L3<0

Short-term analysis
1754-1911

Lee (1981) found weak

relationship between
the two. Similar to my
results negative
relationship in early lags
and positive relationship
in the 4th lag.
4th year positive
relationship is
interpreted as
cumulative effect of
survivors of early years.

Short-term analysis
Sub periods

Relationship between
wages on marriages are
not clear as coefficient
between periods are not
unanimous

Coefficient alternate
between positive and
negative

But general pattern can be

seen between periods.
There is stronger
relationship in period of
1868-1911 compared to
earlier.

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Short-term analysis
Sub periods

Wages positively affect fertility

after one year lag.

Partly explained by positive

relationship between wages and
marriage shown earlier

Shape of coefficent remains

similar but magnitude slightly
stronger for the later period

Lag 0 is not significant as it

takes as least 9 months for the
fertility data to come up in
statistics

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Short-term analysis
Sub periods

Similar pattern across periods.

Sharp decline in fertility for
current but rebound for the
next period, and relatively flat
onwards.

Period of 1869-1911 did not

rebound but stay negative:

Could be due to general

decline in fertility?
Turpeinen (1979): lower
fertility observed in Finland
post 1850 due to increased
literacy, medical progress etc.

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Short-term analysis
Sub periods

Clear contrast between subperiods

Pattern remains similar across

periods but effects weakened
on later periods
Strong relationship in the
earlier periods due constant
occurrence of crisis such as
war and disease. People may
strongly postpone marriage in
crisis periods compared to
non-crisis periods.
Fewer crises on the modern
period thus causing weakened
relationship.
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Short-term analysis
Sub periods

Mortality affected by wage on 0 and 1year lag.

Stronger effect of wages on mortality in

the later period

Contrast the result obtained by Lee for

England
Mortality should have less effect in the
later periods
Lee used wheat price instead of wages.
Wheat price becomes less relevant as
compared to income from industrial
sources as time progresses

Turpeinen (1979): relationship between

crop failures and mortality is not clear.
Finlands mortality does not always
increase following crop failure & vice
versa
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Short-term analysis
Conclusions

There is no single factor explanation.

Whole period analysis: findings for
Finland have parallel aspects to
Lee(1981)s findings for England.
Sub period analysis: clear differences
across periods, impact either gets
stronger or weaker.
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Limitations
Endogeneity problems, reverse causations
Yearly data dampens the effect compared to
monthly data.
Our long term analysis, based on Wrigley &
Schofield (1980), is limited to descriptive statistics
and does not provide any econometrical evidence
or suggests causal relationships.
Crude rates used are aggregates and therefore
limited. A detailed breakdown by age would help
to give a more precise explanation since it can
reveal the sources of change.
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Thank you for your

attention.