Population Growth George Norton Agricultural and Applied Economics Virginia Tech AAEC 3204

Objectives Discuss nature of population growth in the world Consider determinants and consequences of rapid population growth and urbanization

Population issues to be discussed Basic facts about population growth Consequences of population growth Causes of population growth Policies to influence population growth and rural to urban migration

Has population increased at a fairly constant rate since prehistoric times? B.C.Today

World Population Number of People Time 03 million years ago 300 million1 AD 500 million billion billion billion billion billion billion1999

World Population What is the present world population? What is the current growth rate and is the growth rate currently at its historical peak?

Past and projected World population

When would world population double at the current growth rate? Is the growth rate likely to remain at 1.2 percent? Why or why not? 70/1.2 = 58 years

Why has population increased faster in developing countries today that it did in early stages of U.S. development?

Are population growth rates more likely to increase rather than decrease over the next 10 years? Decrease

When will the world population stop growing and at what population? Maybe in 2150 at billion; By 2050, expect about 9 billion

Why does population grow when growth rates are declining? Recent rapid growth means young population with many in child bearing years

Population pyramid

1) 1) Determinants of birth rates 2) 2) Economic factors important in affecting birth rates 3) Consequences of rapid population growth Let’s examine:

Determinants of birth rates Income (economic factors) Culture and social factors Birth control Education Religion Wars

Why are economic factors important in affecting birth rates? Children provide labor in agriculture Children provide social security Children are a consumption good Income implies value of time so number of children Quantity / quality tradeoff

In what sense is population growth a substitute for missing institutions and markets?

Missing Institutions and markets Insurance Insurance MedicalMedical Life insuranceLife insurance DisabilityDisability Natural disasterNatural disaster TheftTheft Social security Social security GovernmentGovernment EmployerEmployer

Gender bias Culture and inheritance laws Culture and inheritance laws Low female wages reduces opportunity cost of children Low female wages reduces opportunity cost of children Education of females Education of females

Externalities What externalities might be involved with fertility choices and why? What externalities might be involved with fertility choices and why? Costs of certain public goods such as schools and infrastructure might exceed private costsCosts of certain public goods such as schools and infrastructure might exceed private costs Environmental effectsEnvironmental effects Family structureFamily structure

What are the consequences of rapid population growth? Negative Negative FoodFood Difficult to educateDifficult to educate EnvironmentEnvironment Age dependencyAge dependency JobsJobs Capital shallowingCapital shallowing Investment diversionInvestment diversion Positive Positive Labor Economies of scale Market Intellectual base for ideas and innovations Effect on demand for technologies

What are some policies that influence population growth? Policies for social and economic improvement Social security system Family planning Female education

Urbanization also increasing with rural to urban migration Nature of migration Why migration occurs Consequences Policy implications

Rural to urban migration 1980’s and 90’s– population growth in LDC’s averaged 2.1% But, urban population growth averaged 3.5% (in many countries, 6 to 8%)

Why is rural to urban migration good and why is it bad? Good Labor for industry (efficient use of resources) Education: costs and benefits Larger markets Bad Unemployment Housing & Public services Environment

Why do people migrate from rural to urban areas? Economic factors Benefits of move Costs of move Planning horizon Social & cultural factors

Who tends to migrate? Age of migrants?   Young Education of migrants?   Better educated Marital status of migrants?   Single

Harris-Todaro Model of Migration Potential migrants evaluate the “potential” or expected gains from migration versus the costs Expected gains: real income differential times the probability of receiving a job offer Probability is inversely related to the rate of unemployment Migration rates in excess of urban job growth rates are expected in this model

What is the urban informal sector? Why is the informal sector both good and bad for developing countries?

What policies can affect rural to urban migration? Improve services in rural areas (education, health, etc.) Remove bias in economic policies Jobs in rural areas

Conclusions Population growth and R-U migration have been rapid in developing countries in recent years Many causes but several are economic and institutional Effects are positive and negative Public policies can influence pop growth and R-U migration rates