Land, population, migration, and growth: a note revisiting the Solow mechanism in a panel framework

This paper revisits the relationship between population growth and economic performance by extending the Solow framework to include land as a fixed factor in a two-sector economy and migration as an endogenous adjustment. Because only agriculture uses land, effective land intensity becomes endogenous to structural transformation, declining as economies diversify. The impact of population growth therefore depends on land scarcity but is mitigated by sectoral reallocation and migration. Using a panel of 152 countries over 1960–2023 and both fixed-effects and system- Generalized Method of Moments (GMM) estimators, we show that the effect of natural population growth on per-capita income growth is highly conditional. Population growth becomes growth-reducing in agriculture-dependent and land-scarce economies, but this effect is attenuated by lower agricultural shares and land-saving technological progress. Migration further alleviates demographic pressure by reallocating labor away from land-intensive production.