automatically.3 High-latitude countries have accomplished the transition already, resting at low
mortality and fertility rates. Low-latitude countries have experienced some reduction of mor-
tality (which is, however, still high, cf. Figure 1) but this has not yet triggered a comparable
decline of fertility rates. The problem with this argument is that a picture similar to Figure 2
could have been drawn already in 1960. Over the years the negative latitude-population growth
correlation became even somewhat stronger mainly because some countries at medium latitudes
(e.g. Japan, Korea, Portugal, Spain) accomplished the second step of the demographic transition
and simultaneously little has changed in tropical regions.
One interpretation of the result is that the demographic transition is extraordinary slow and
possibly stagnant in many tropical regions of high mortality (Bloom and Sachs, 1998).4 A
second possible interpretation is that although a demographic transition is taking place almost
everywhere (albeit at different speed) population grows at higher rates along the transition
path for geographically unfavorable regions. For example, maximum population growth rates
attained along the transition path of Western Europe’s countries were around 2 percent per
year or lower. They are now around 4 percent for tropical countries. Both effects of geography
and mortality, slower demographic transition and higher population growth along the transition
path, and their consequences on macroeconomic performance will be explained and investigated
in the present paper.
The standard economic model on optimal fertility choice (Barro and Becker, 1989) supports
the biologist’s viewpoint: Population growth should not be lower and possibly higher when
child survival probabilities improve i.e. ceteris paribus at geographically favorable locations.
The simple reason is that parents are not interested in births as such but in surviving family
members and time costs of producing a surviving children decrease with child mortality. This
price effect occurs irrespective of aspects of human capital accumulation and a child quality-
quantity trade-off.
To explain why population growth is higher at high mortality rates the literature has therefore
referred to precautionary child bearing (Kalemli-Oscan, 2002, 2003). Given uncertainty about
the number of surviving children at a unique date of a discrete fertility decision, it depends on
curvature of the utility function whether parents react on improving child survival with higher
3See Lagerlof (2003) for a model on the onset of the demographic transition in the Western world.
4This conclusion is mainly driven by the countries from the African continent. Important successful outliers are
Singapore (at 2o), Costa Rica (at 9o), and Thailand (at 15°).