Economic Growth In Sub-Saharan Africa: A View From Unified Growth Theory
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Economic growth in Sub-Saharan Africa (SSA) has been one of the main concerns of economic growth literature. There was no economic growth in SSA until several decades. This study attempts to explain the causes of earlier stagnation and recent growth in the region via households’ decisions on the child quantity-quality (Q-Q) tradeoff. After reviewing the literature on growth economics, we show why Unified Growth Theory (UGT) is potentially useful to understand the experience of SSA economies. The canonical model of UGT defines modern growth as a regime where productivity growth and education has virtuous circle and where increases in education lead to decreases in fertility. To test whether SSA economies exhibit modern growth a la UGT, we use Ordinary Least Squares (OLS) and Instrumental Variables (IV). Our results verify that, for 27 countries in SSA and for the period of 1960-2010 education has a strong and causal negative effect on fertility. Besides, this result is robust to the addition of several controls. Another important result is on the threshold effects. When we divide our sample into low-education and high-education groups, the child Q-Q tradeoff is active in high-education group. Therefore, there perhaps exists a level of education above which fertility declines causally as a response to increasing educational attainment. Lastly, differenced and system Generalized Method of Moments (GMM) estimations show that high fertility rates are traditional in SSA as lagged fertility is positive and significant, but it does not remove the negative causal effect of education on fertility.