The proposed project develops and evaluates a model exposing the relative roles of demography (age/sex structures) and economics (output price, productivity and quality) on aspects of American economic development over the period 1890-1990. Emphasis is focussed on """"""""economic-dependency"""""""" rates--the share of total market and non-market output devoted to the support of dependents. As formulated, this measure highlights key elements of human capital formation and is consistent with modern theories of economic growth and microeconomic models of fertility. The goal is to inject a quantitative historical perspective into the analysis of several so- called """"""""population problems,"""""""" including: 1) the impacts of changing family structures on direct and indirect costs of children; 2) the costs to society of health and retirement care for the elderly; and 3) the changing roles of women in child-caring and the formal labor force. A model is specified that identifies eighteen economic and demographic variables which must be assembled or estimated. Using the methodology of the historical counterfactual, the model can be simulated to reveal the relative roles of demographic and economic change on dependency and alleged population problems. The findings should not only illuminate the past, but also identify tradeoffs and interactions relevant to assessing future policies. The results could also have considerable applicability beyond the U.S., including an assessment of the consequences of high youth dependency associated with rapid population growth in the Third World. Debates on these consequences have been contentious, and they are generally uniformed by historical norms and perspective.Moreover, modeling of economic-demographic linkages has been mechanical, suppressing relevant tradeoffs. Based on these unrealistic scenarios, emphasis has been placed on compiling potential economic savings due to lowered dependency, rather than assessing relevant tradeoffs and their resultant actual savings. Only history can offer a guide here.The proposed project will expose empirically relevant economic-demographic interactions based on a century of American experience, compare the results with recent evidence from cross-country studies and data, and reconcile the findings to provide a sounder basis for appraising the roles of demography and dependency in development.
