Population Growth and

Economic Development
POPULATION THEORIES

10 LARGEST COUNTRIES IN THE

WORLD
IN 2007 AND 2050 PROJECTIONS

Source: Population Reference Bureau. 2007 World Population Data Sheets (2007).

Community Service Council of Greater Tulsa

Facts on world population

Total world population: 6.1 billion

About 75% of people live in developing countries
About 60% of the population lives in Asia and
Oceania
About 40% of people live in only 15 countries
By 2200, over 90% of population will live in what
today are developing countries

Topics
Demographic

measures
Theories of population
Population growth in the world
Population Policies

Demographic measures
Birthrate
Death

rate
Rate of natural increase
Infant mortality rate
Life expectancy at birth
Doubling time
Dependency ratio

Population Growth and

Economic Development
Population

growth and economic

development are inter-related
1. Population growth affects economic
development (Malthusian theory and
Optimum population theory)
2. Economic development affects
population growth(Theory of
Demographic Transition)

Impact of population growth on

economic development

Reduction in birthrates can raise per-capita income in 3

ways
lower dependency ratio
low consumption and high savings
Shift of labor force investment from capital widening to
capital deepening
Some important quality of life indicators related to
population growth
Improvement of levels of living
Increase in the labor forces
Higher population growth rates and poverty
Quality of health care and education
Relationship between poverty and family size

Fertility and income

Population Growth, 1750-2200: World,

Less Developed Regions, and More
Developed Regions

Population Pyramids: Less Developed

and More Developed Countries; 1998

MALTHUSIAN THEORY OF
POPULATION

Thomas Malthus

1766-1834. Born near Guildford!

Wrote An essay in the First Principle
of population first published in 1798
Debatable whether the principles of
Malthus two hundred years ago (that
were very revolutionary and
controversial) have any relevance to
the modern world.
The world population in 1798 was at
0.9 billion people. We have now
passed the six billion mark.

The Core Principles of Malthus

Food is necessary for human existence

Human population tends to grow faster than the
power in the earth to produce subsistence
The effects of these two unequal powers must
be kept equal
Since humans tend not to limit their population
size voluntarily - preventive checks operate in
Malthus terminology.
If preventive checks do not operate positive
checks will control population by famines,
disease, social unrest that lead to more deaths
than births

Malthusian Theory of Population

Population tends to grow at a geometric rate,

doubling every 25 years
Food 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 level.
Preventive and positive checks
Technological progress is not considered

MALTHUSIAN THEORY
F: 1 2 3
4
5
P: 1 2 4
8 16 ..
F/P 1 1 .75 .50 .31 ..

Thus per capita food availability will be

drastically reduced and the result is famine and
death. Hence population will automatically get
reduced. Malthus called it as a positive check.
Malthus said that there are preventive checks
like :small family norm, late marriages, celibacy,
etc.,

and therefore he said.

War,
famine,
disease.

CRITICISM OF MALTHUSIAN THEORY

Malthusian theory is a pessimistic
theory
2. Man is born with two hands and only
one mouth
3. Malthus ignored Technology in food
production
4. International cooperation will help
countries suffering with famines and
diseases
1.

OPTIMUM THEORY OF POPULATION

Dalton, Robbins have developed the theory of

OPTIMUM POPULATION
They vehemently criticized the Malthusian theory for
its pessimism
They assumed that population growth is
advantageous in the initial period and after achieving
optimum population, it will be disadvantageous
Optimum population(O) is defined as that population
where there is the highest per capita income
They gave the formula for calculating surplus or
deficit population
M= (A-O)/O where M=maladjustment, A=actual
population, O= optimum population

The Demographic Transition

(Thompson and Lewis)
Stage

I: high birth rates and death rates

Stage II: continued high birth rates,
declining death rates
Stage III: falling birth rates and death
rates, eventually stabilizing

Dependency problems
Old

age structures and young age

structures both create problems with
supporting dependents; they are just
different problems.
Young age structure requires expanding
labor markets, investments in education
Investments in older people less likely
to enhance productivity

The present demographic transition in

developing countries
Stage II already occurred in most of the
developing world,but with higher birthrates
than in the developed world.
Stage III:
has been similar to developed countries for
some developing countries like Taiwan, South
Korea, China,Chile, Costa Rica
has not occurred yet for other countries mainly
in Sub-Saharan Africa and the middle east.

Rapid and Slow Transition

Rapid transition
Japan
South Korea
Taiwan
Singapore
Thailand
Indonesia

Slow Transition
Pakistan
India
Bangladesh
Philippines
Papua New Guinea

Miracles of rapid transition in

East Asia
Rapid

demographic change creates windows

of opportunity for accelerated economic
growth

Rapid growth of labor force

Saving and investment
Changing roles of women
Human resource investment

Stage of Demographic Transition

and population requirement
Population

growth may be good at the

beginning
In the middle factors like political
stability, cultural resources, and
economic efficiency may be much more
important than population growth
Reaching high income may require
slowing growth

Household theory of fertility

Family size is a decision taken at the

microeconomic level by households based on a
rational economic decision on demand for
children
Income effect: Higher income allows for larger
family size
Substitution effect: Higher cost of children implies
smaller family size
Other theories

Why are there so many children

inBecause
poor countries?
children are an investment rather
than a consumption good the expected
return of theinvestment is given by child
labor and financial support for parents in old
age
Parents have children up to the point at
which their marginal economic benefit is
equal to marginal cost

Hidden momentum of
population growth
It

is the tendency of population growth to

continue, even after birthrates have decline
substantially.
Substantial changes in birthrates may take
decades
when the young population is large, in the near
future high-fertility population will be
high,even if fertility levels are lower.

Policy approach to deal with the high

population growth
Decrease

marginal economic benefit of

children:
Increase the minimum-age child labor
provide better old-age social security
Increase marginal cost of children
Increase education, employment and wages
for women

Policy approach

Better water and public health programs in rural

and urban poor areas to lower infant mortality
Implementation of family-planning programs
Improvement of quality of care of health and
family planning programs
Monetary subsidies to small families
Political commitment and role of religious leaders