Presentation on theme: "Population Growth and Economic Development"— Presentation transcript:
1 Population Growth and Economic Development Causes, Consequences, and Controversies
2 Outline Trends in population growth Definitions and concepts The hidden momentum of population growthThe demographic transitionThe causes of high fertility in developing countriesEffects of Population growth on economic development: Conflicting viewsPolicy options: Case study of Somalia
3 Case studyPopulation, famines, and entitlement theory: Application to the case of Somalia.Note: Three copies of the case study are placed on reserve (ECON 320) in the Main library
4 The Basic QuestionsIs there a relationship between population growth and QOL?Six major issues:Will developing countries be able to improve levels of living given their anticipated population growth?How will developing countries deal with the vast increases in their labor forces?How will higher population growth rates affect poverty?
5 The Basic Issue Population growth and QOL Will developing countries be able to extend the coverage and improve the quality of health care and education in the face of rapid population growth?Is there a relationship between poverty and family size?Is affluence in developed countries more harmful to global environment and to the poor than the absolute increase in their numbers?
13 Concepts and definitions Rate of population increase is measured as the percentage yearly net relative change in population due to natural increase and net international migration.Natural increase is the difference in the fertility rate and mortality rate.Total fertility rate (TFR) is the average number of children a woman would have assuming that the current age-specific birth rates remain constant throughout her childbearing years. The child bearing years range between years of age.
16 Concepts and definitions Dependency burden:Youth dependency ratioOld age dependency ratioThe youth dependency gives rise to the hidden momentum of population growth.It is a dynamic latent process of population growth where population continues to grow despite a fall in birth rate due to larger number of child bearing couples.
17 Population Pyramids: Less Developed and More Developed Countries; 1998
23 Causes of High Fertility in Developing Countries The Malthusian population trapPopulation grows at a geometric rate and food supplies expand at an arithmetic rate.Percapita incomes would fall to the subsistence levelCriticismsAssumes decreasing returns to scaleAssumes relation between population growth rate and levels of per capita incomesFocus on the wrong variable- percapita income
24 Malthusian population model Population tends to grow at a geometric rate, doubling every 30 to 40 yearsFood supplies only expand at an arithmetic rate due to diminishing returns to land (fixed factor)Malthusian population trap: countries would be trapped in low per-capita incomes (per capita food), and population would stabilize at a subsistence level1. preventive checks 2. positive checks
25 Causes of High Fertility: Malthusian Population Trap
27 Causes of High Fertility in Developing Countries The Microeconomic Household Theory of FertilityIndividual or family decision making is the principal determinant of family sizeThe interplay between microeconomic determinants of family fertility are understood using theory of consumer choiceFertility decisions (family size) are taken at the microeconomic level by households. It is a rational economic decision of “demand for children.”
28 Microeconomic Theory of Fertility Why are there so many children in poor households?children are an “economic investment” rather than a “consumption good”the “expected return of the investment” is given by child labor and financial support for parents in old ageIn developing countries, parents have children up to the point at which marginal economic benefit = marginal private cost
29 Microeconomic Theory of Fertility Empirical evidenceobservations for population growth
30 Demand for Children Equation WhereCd is the demand for surviving childrenY is the level of household incomePc is the “net” price of childrenPx is price of all other goodstx is the tastes for goods relative to children
31 Demand for Children Equation Under neoclassical conditions, we would expect:
32 Microeconomic Theory of Fertility: An Illustration
33 Views on population and economic development Pessimist viewOptimist viewNeutralist viewPlease complement the slides with the lecture notes.
34 Effects of Population Growth on Economic Growth Population growth restricts economic growthThe “pessimistic” TheoryPopulation growth promotes economic growthThe “optimistic” theoryPopulation growth is independent of economic growthThe “neutralist” theory
35 Effects of Population Growth on Economic Growth: Pessimists Negative consequences of population growth on:Economic growthPoverty and InequalityEducationHealthFoodEnvironmentInternational migration
36 Effects of Population Growth on Economic Growth: Pessimists Negative consequences of population growth on:Extremist argumentPopulation-poverty cycle theory
37 Effects of Population Growth on Economic Growth: Optimists Population is not the problem but the following are:UnderdevelopmentResource depletion and environmental degradationPopulation distributionSubordination of womenExtreme viewInternational dependence theoryRevisionist view point
38 Effects of Population Growth on Economic Growth: Neutralists No statistical relationship between population and economic growth.Developing countries can take advantage of the demographic dividend.CONCLUSION: CONSENSUS OPINION ON POPULATION GROWTH
39 Effects of Population Growth on Economic Growth: Consensus CONCLUSION: CONSENSUS OPINION ON POPULATION GROWTH