Effects Of Population Growth On Economic Development – This is “Population Growth and Economic Development”, section 19.2 from the book Macroeconomics Principles (v. 2.0). For details on that (including licensing), click here.

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Effects Of Population Growth On Economic Development

Effects Of Population Growth On Economic Development

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What Is The Demographic Dividend?

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Effect Of Overpopulation

It is easy to see why some people have become alarmists when it comes to population growth in developing countries. Looking at the world’s low-income countries, they see a population of more than 2 billion growing at a rate that suggests doubling every 31 years. How are we going to cope with so many more people? The following statement captures the essence of widely expressed concerns:

“At the end of each day the world now has over two hundred thousand more mouths to feed than it had the day before; at the end of each week, a million and a half more; at the end of each year, another eighty million. … Humanity, now doubling its numbers every thirty-five years, has fallen into an ambush of its own making; economists call it the “Malthusian trap,” after the man who most forcefully stated our biological situation: population growth tends to outstrip the supply of food.” Philip Appleman, ed., Thomas Robert Malthus: An Essay on the Principle of Population – Text , Sources and Background, Criticism (New York: Norton, 1976), xi.

But what are we to say about such a statement? Certainly, if the world’s population continues to increase at the rate it has grown for the past 50 years, it is less likely that economic growth will translate into an improvement in the average standard of living. But the rate of population growth is not a constant; it is affected by other economic forces. This section begins with a discussion of the relationship between population growth and income growth, then moves to an explanation of the sources of population growth in low-income countries, and concludes with a discussion of the Malthusian caveat suggested in the quote above.

Effects Of Population Growth On Economic Development

On a simplified level, the connection between growth in population and growth in income per capita is clear. After all, per capita income equals total income divided by population. The growth in income per capita roughly corresponds to the difference between income growth and population growth. For example, Kenya’s annual real GDP growth from 1975 to 2005 was 3.3%. Population growth during this period was 3.2%, giving it a GDP per capita growth of just 0.1%. A slower population growth, along with the same GDP increase, would have given Kenya more impressive increases in per capita income. The implication is that if the developing countries want to increase the growth of GDP per capita compared to the developed countries, they must limit population growth.

A Meta Analysis Of Projected Global Food Demand And Population At Risk Of Hunger For The Period 2010–2050

Figure 19.2 “Population and Income Growth, 1975–2005” shows population growth rates versus per capita GDP growth rates from 1975 to 2005 for more than 100 developing countries. We do not see a simple relationship. Many countries experienced both rapid population growth and negative changes in real GDP per capita. But still others had relatively rapid population growth, yet they had a rapid increase in GDP per capita. There is obviously more to achieving gains in income per capita than a simple decrease in population growth. But the challenge raised at the beginning of this section remains: Can the world continue to feed a population that grows exponentially—that is, doubles over fixed intervals?

A scatter plot of population growth rates versus GDP per capita growth rates for various developing countries for the period 1975–2005 suggests no systematic relationship between population and income growth.

. It proved to be one of the most enduring works of its time. Malthus’s basic argument was that population growth will inevitably collide with diminishing returns.

Diminishing returns mean that adding more labor to a fixed amount of land increases production, but by ever smaller amounts. In the end, Malthus concluded, the increase in food production would be too small to sustain the increased number of people consuming this production. As the population continued to grow unchecked, the number of people would eventually exceed the country’s ability to generate enough food. It would be an inevitable Malthusian trap. A point where the world is no longer able to meet its population’s food needs, and hunger becomes the primary control of population growth. , a point where the world is no longer able to meet its population’s food needs, and hunger becomes the primary control of population growth.

Population And Environment: A Global Challenge

A Malthusian trap is illustrated in figure 19.3 “The Malthusian trap”. We can determine the total amount of food needed by multiplying the population in any period by the amount of food required to keep one person alive. Because the population is growing exponentially, the need for food is increasing at an increasing rate, as shown by the curve labeled “Food Needed.” Food produced, according to Malthus, rises by a constant amount each period; the increase is shown by an upward sloping straight line labeled “Food produced.” Food required eventually exceeds food produced, and the Malthusian trap is reached at some point

If the population grows at a fixed exponential rate, the amount of food required will increase exponentially. But Malthus believed that the production of food could only increase by a constant amount each period. Given these two different growth processes, food demand would eventually catch up with food production. The population hits the subsistence level for food production at the Malthusian trap, shown here at point T.

What happens at the Malthusian trap? It is clear that there is not enough food to support the population growth indicated by the “Food Needed” curve. Instead, people starve, and the population begins to rise arithmetically, held in check by the “Food Produced” curve. Hunger becomes the limiting force for the population; the population lives on the edge of subsistence. For Malthus, the long-term fate of humans was a standard of living barely sufficient to keep them alive. As he put it, “the view has a melancholy hue.”

Effects Of Population Growth On Economic Development

Fortunately, Malthus’s predictions do not match the experience of Western societies in the 19th and 20th centuries. A weakness of his argument is that he failed to take into account the gains in production that could be achieved through increased use of physical capital and new technologies in agriculture. Increases in the amount of capital per worker in the form of machinery, improved seeds, irrigation and fertilization have enabled enormous increases in agricultural production at the same time as the supply of labor was increasing. Agricultural productivity rose rapidly in the United States over the past two centuries, exactly the opposite of the fall in productivity that Malthus had expected. Productivity has continued to increase.

Negative Growth: Definition And Economic Impact

Malthus was also wrong about the relationship between population growth and income. He believed that any increase in income would increase population growth. But the law of demand tells us that the opposite can be true: higher incomes tend to reduce population growth. The primary cost of having children is the opportunity cost of the parents’ time raising them – higher incomes increase this opportunity cost. Higher incomes increase the cost of having children and tend to reduce the number of children people want and thus slow population growth.

Panel (a) in figure 19.4 “Income levels and population growth” shows the birth rates of low-, middle- and high-income countries for the period 2000–2005. We see that the higher the income level, the lower the birth rate. Fewer births lead to lower population growth. In panel (b), we see that high-income nations had much lower population growth than middle- and low-income nations over the past 30 years.

Panel (a) shows that low-income nations had much higher total fertility rates (births per woman) in the period 2000–2005 than high-income nations. In panel (b), we see that low-income nations had much higher

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