“ What is the effect of a non-constant population

growth on economic development? Does economic

development influence population growth? What do
we mean for “sustainable” population growth?”
Simplistic level  the relationship between population growth and per
capita income is clear  per capita income equals total income
divided by population.

THOMAS MALTHUS (1789):

population increases geometrically while food production increases in
arithmetic progression (more slowly) → so eventually, there is not
enough food
...but he does not consider TECHNOLOGICAL PROGRESS!!
 Sustainable population growth

Sustainable population growth means the rate at which the

number of inhabitants of a given area can increase without
overburdening the area's economic, social and natural
resources.

"Carrying capacity" : number of inhabitants who can be

supported in a particular area -- given that natural resources
are finite -- without degrading the physical and social
environment at present or for future generations.
“Can a couple’s fertility behaviour impose costs on
society at large?”

Private fertility decisions have several effects.

(1) Where there are common-property resources, population growth can result
in congestion or over-rapid resource degradation (economies of scale
diminish)
(2) Population growth tends to benefit holders of land and capital
(3) Parental fertility decision may not always be in their children’s best
interests, particularly when parents underestimate the pace and
consequences of social change over their children’s lifetimes.
 EFFECTS OF SLOWER POPULATION
GROWTH ON ECONOMIC DEVELOPMENT

●
NATURAL ENVIRONMENT
●
EXHAUSTIBLE RESOURCES
●
RENEWABLE RESOURCES
●
CAPITAL PER WORKER
●
TECHNOLOGICAL INNOVATION AND ECONOMIES OF SCALE
●
SCHOOLING AND HEALTH
●
INEQUALITY IN DISTIBUTION INCOME
●
URBAN GROWTH
“Will slower population growth alleviate pollution
and the degradation of the natural environment?
“What makes it hard to organize the environment is that
everything we touch is hooked up to everything else.”
Isaac Asimov, 1988

→ Environmental resources are common property → overexploitation →

pollution and degradation (SHORT RUN)
→ International problem
In the long run, population growth itself might create greater incentive
to develop the social and political institutions necessary for
conservation. Such incentive are irrelevant, of course, if the resources
has become depleted beyond the point of restoration.
“Will slower population growth increase the growth rate
of per capita income through increasing per capita
availability of exhaustible resources?”

Exhaustible resources: fossil fuels energy supply (oil, gas, coal),

minerals (copper, nickel)  finite supply in the earth’s crust.
More population growth  increases rate of resource depletion

Price rise should stimulate:

- Conservation,
- The search of less expensive substitutes,
- Improvements in extraction technology.
Koopmans (1974) argues that the rate of population growth has no
effect on the number of people who will have access to that resource,
although advance the date at which exhaustion occurs.
 “Will slower pop growth increase the growth rate of per
capita income through increasing per capita availability of
renewable resources?”
Renewable resources:
-Capacity for reproduction and growth
-Potentially capable of providing economic services in perpetuity so long as
their regenerative capability is not damaged.

If population growth increases - this creates a problem for agriculture:

- Degradation renewable resouces
- Labour productivity decreases → lower wages

→ Need of institutional and technological adaptation

“Will slower population growth lead to more capital per
worker, thereby increasing per worker output and
consumption?”

Greater population growth on capital/labor ratio has 2 components:

- Directly decrease the capital/labor ratio
- Change the rate of savings and investments

Since the second effect is indetermined  greater population growth could be

detrimental in term of decreasing productivity (if we do not consider
technological changes!!!)
 “Do lower population densities lead to lower per capita
incomes via a reduced stimulus to technological innovation
and reduced exploitation of economies of scale in production
and infrastructure?”
Manufacturing:
●
Economies of scale at urban level
●
Imported technology: little stimulus for local technological progress

●
Slower population growth would have any negative effect on productivity

In agriculture: population growth leads to:

- Technological progress
- Economies of scale by spreading fixed costs in infrastructure and research
over a large number of people
“Will slower population growth increase per capita levels
of schooling and health?”
Countries with slower population growth:
- Greater public expenditures on schooling
- Higher levels of health per child
- Improvement in educational quality (test performance)
- Non necessarily faster growth in enrollment ratios

GOVERNMENT INTERVENTION
- Family planning programs  provision on contraceptive services, together
with information about contraception and child spacing.
 “Will slower pop growth decrease the degree of
inequality in the distribution of income?”

If publicly supported family planning programs are targeted at the poor

 per capita income inequality will be reduced.

Long-term effect due to:

- Raising payments to labor relative to payments to capital
- Raising payments to unskilled labor relative to skilled labor
INDIA
"The population clock in New Delhi, now ticks at the rate of 31 persons per minute.
The clock shows that about 44,640 babies are born in India everyday. ”
Adverse effects of India’s rapid
population growth…
UGANDA
Case Study: EU
 A 2005 Study found that:
●
Immigration is not a feasible way of reversing population ageing or its consequences.

●
National policies can slow fertility declines under the right circumstances.

●
However, no single policy intervention necessarily works.

●
And, what works in one country may not work in another. Social, economic, and political
contexts influence the effect of policies.

●
Policies designed to improve broader social and economic conditions may affect fertility,
indirectly.

●
Population policies take a long time to pay dividends—increases in fertility taking a
generation to translate into an increased number of workers—making such policies politically
unattractive.
Source: RAND Research (2005) ‘Population Implosion? Low Fertility and Policy Responses in the European Union’
In short, the effects of rapid population growth are likely to be
affected by the:
1. the nature of government policies
2. features of the natural environment
3. quality of markets

Slower population growth would be beneficial to

economic development for most developing countries.
Does economic development influence population
growth?

In early stage of economic development, population expansion tends

to be more a consequence rather than a cause of poverty.
As the country develops economically, the size of its population tends
to assume a more indipendent (exogenous) role in the economic
growth process.

“Only by raising the living standards of the

poorest can we achieve sustainable, global
population growth” Hans Rosling
Principles of Macroeconomics by Libby Rittenberg, Timothy Tregarthen (1999),

Working Group on Population Growth and Economic Development, National Research

Council (1986) Population Growth and Economic Development: Policy Questions,
Washington, DC)

World Population Prospects, The 2000 Revision, Highlights; February 2001; Population Di
vision, Department of Economic and Social Affairs, United Nations

Population Bulletin: "World Population Highlights: Key Findings From PRB's 2010 World
Population Data Sheet

http://www.web-books.com/eLibrary/NC/B0/B62/095MB62.html
Anoop Kumar, ‘Population problem in India & its implications’

RAND EUROPE, ‘Population Implosion? Low Fertility and Policy Responses in the European Union’

Stephan Klasen and David Lawson, ‘The Impact of Population Growth on Economic Growth and
Poverty Reduction in Uganda’

David E. Bloom David Canning ‘Population Health and Economic Growth, commission on growth and
development’

Stephan Klasen, ‘Population Growth, (Per Capita) Economic Growth, and Poverty Reduction in
Uganda: A brief Summary of Theory and Evidence’