Lesson 2: Births, Deaths, and Economic Growth


1. A key to understanding people’s behavior is figuring out the incentives they face.

ECONOMIC CONCEPTS that support the historical analysis:

Economic Growth

Supply and Demand

Land/Labor Ratio


Marginal Benefit and Marginal Cost

Household Decision-making


History Standards (from National Standards for History by the National Center for History in the Schools)

Era 2 – 1: The student understands why the Americas attracted Europeans, why they brought enslaved Africans to their colonies, and how Europeans struggled for control of North America and the Caribbean.

Economics Standards (from Voluntary National Content Standards in Economics)

Standard 5: Students will understand that voluntary exchange occurs only when all participating parties expect to gain. This is true for trade among individuals or organizations within a nation, and among individuals or organizations in different nations.


  • Historically, population growth was a major source of growth in aggregate national output, the growth rate of which can be expressed, mathematically, as the sum of the growth rate of population and the growth rate of output per person.
  • From the late eighteenth century, U.S. birth rates were higher than those in Europe, because: Land was more abundant and labor more scarce in the colonies; children are more valuable assets in agrarian societies; fertility was controlled by social customs, particularly age at marriage.
  • Conversely, U.S. death rates were lower than those in Europe, because: More abundant and regular food supply; smaller urban population.
  • Population growth from natural increase rose and then fell over time – a process referred to as the Demographic Transition.
  • As the population shifted from rural to urban areas, birth rates fell dramatically; the opportunity cost of women’s time increased; mechanization of farming reduced the return to child labor on farms; incomes rose.
  • Death rates fell dramatically, due to higher incomes and better, or at least more abundant, nutrition; better public health, particularly among infants and young children; and (later) better medical care.

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