Puffer Fish wrote:It does get a bit complicated.
Lower birth rates can lead to higher wages, but higher wages can have various effects in different situations, sometimes increasing birth rates and sometimes decreasing them (a complicated subject which we can discuss in a different thread).
If we assume that higher wages increase wages, then we would expect an equilibrium to likely be reached as some point, where wages are constrained by population growing too fast.
I would say there's consensus that higher per capita income and associated technological and sociological changes led to the lower birth rates in the industralized world. The birth rate's impact on population growth also depends on life expectancy by the way. The latter increased dramatically.
As for the impact of population growth on per capita income, it's not as big of a deal as some people seem to think. Basically, you have to maintain the per capita capital stock. The annual capital depreciation rate is maybe 10%. Better technology makes to capital stock obsolete to some degree, let's say by 2% per year. Add to that a population growth rate of 1% and that means you must invest 13% of your per capita capital stock to maintain it. If population growth changes from 1% to 2%, which is substantial, that means you must invest 14% instead of 13%, hence your gross savings must be ~8% higher, and consumption correspondingly lower. For example if your gross saving rate was 20%, it must now be 21.6%.
That's not so say it couldn't matter for a society living from hand to mouth, barely capable of saving enough to maintain the capital stock with a stagnant population. But I bet that didn't apply to 19th century Britain with its ample supply of hard-nosed capitalists who would reinvest their income instead of giving it away to the hungry masses.