Climate and the Emergence of Global Income Differences

Abstract

Abstract:The latitude gradient in comparative development is a striking fact: as one moves away from the equator, economic activity rises. While this regularity is well known, it is not well understood. In the present paper we take a step towards unpacking this gradient. Perhaps the strongest correlate with (absolute) latitude is the intensity of ultraviolet radiation (UV-R), which epidemiological research has shown to be a cause of a wide range of diseases. We establish that UV-R is strongly and negatively correlated with economic activity, both across and within countries. We propose, and test, a mechanism that links UV-R to current income differences via the impact of disease ecology on the timing of the take-off to sustained growth.

Physiological Constraints and Comparative Economic Development

“…Since UV-R and absolute latitude are very strongly correlated, Column 2 of Table 2 introduces UV-R as a separate control. 6 Consistent with the results in Andersen et al (2016), UV-R is negatively correlated with economic activity, even controlling for country and language fixed effects. 7 At the same time absolute latitude remains positively correlated with economic activity.…”

“…In order to gauge if the latitude gradient can be accounted for by cultural adaptation, Table 2 therefore studies the link between absolute latitude and current economic activity, when the data has been pruned for cultural differences to the extent possible. Following Andersen et al (2016) we employ a full set of language fixed effects to proxy world wide variations in cultural values, under the assumption that differences in local languages represents a meaningful proxy for cultural differences. Controlling for "culture" in this manner means adding in excess of 1000 fixed effects to the regression model.…”

“…5 As seen from Columns 4 and 5 of Table 2, when both country and language fixed effects are in the control set the positive link between absolute latitude and economic activity still obtains. This provides some assurance that the "latitude 5 See Andersen et al (2016) for details on the construction of the language fixed effects.…”

Fertility and Early-Life Mortality: Evidence from Smallpox Vaccination in Sweden

“…Our fertility data are measured at the parish level which is highly disaggregated, and it seems plausible to assume that smallpox vaccination is also exogenous at this level. 3 Using the same type of estimation strategy, Hansen (2013) demonstrates that the decline in infectiousdisease mortality in the second half of the 20th century is positively related to human capital accumulation the life cycle, their instrument could work through a much broader set of mechanisms than the one used in the present paper. Second, since smallpox vaccination was the …rst vaccination and the major medical innovation at the time, it is di¢ cult to think of medical interventions that occurred at the same time and also correlate with pre-intervention smallpox mortality rates.…”

“…Earlier work by Acemoglu and Johnson (2007) and Hansen (2014) use the timing of elimination of a host of infectious diseases combined with prevalence rates prior to those interventions to identify the impact of health on wealth. 3 In terms of mortality across 1 In the literature on the fertility transition, historical evidence indicates that the decline in early-life mortality cannot account for the fertility decline since it started beforehand (Galor, 2011). By contrast, Kalemli-Ozcan (2003, 2008 argues that the decline in the uncertainty of the survival rates of children, brought on by lower child mortality, leads parents to decrease their precautionary demand for children, and this reduces fertility.…”