Does size matter? Implications of household size for economic growth and convergence

I have another working paper that has just been submitted for consideration. This time, it is co-authored with Vadim Kufenko and Klaus Prettner (see our previous paper in Economics Bulletin here and our working paper on History-Augmented Growth Models here). We argue that the study of convergence is impaired by the absence of corrections in variance changes in household size. As household size relates economies of scale in consumption, it has relevance to the measurement of living standards. The abstract of the paper is below:

We assess the effects of changes in household size on the long-run evolution of
living standards and on cross-country convergence. When the observed changes in
average household size across countries are taken into consideration, growth in living standards is slower throughout the 20th century as compared to a measure based on per capita GDP. Furthermore, the speed of divergence between different countries before 1950 is faster and the speed of convergence after 1950 is slower after adjusting for the evolution in household size.


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