Population Growth and Economic Development – Principles of Macroeconomics
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. If an economy is growing but the population re- assumed that the relationship between popula- tion growth and economic development is re- flected in the. With regards to the direction of population growth-economic growth nexus, we found one-way . detrimental for economic development. Mason () also.
But the challenge raised at the beginning of this section remains: Can the world continue to feed a population that is growing exponentially—that is, doubling over fixed intervals? It proved to be one of the most enduring works of the time. Diminishing returns imply that adding more labor to a fixed quantity of land increases output, but by ever smaller amounts.
Eventually, Malthus concluded, increases in food production would be too small to sustain the increased number of human beings who consume that output. As the population continued to grow unchecked, the number of people would eventually outstrip the ability of the land to generate enough food.
There would be an inevitable Malthusian trapa point at which the world is no longer able to meet the food requirements of the population, and starvation becomes the primary check to population growth. A Malthusian trap is illustrated in Figure 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.
The faster the rate of population growth, the sooner t1 is reached. But Malthus held that the output of food could increase only by a constant amount each period. Given these two different growth processes, food requirements would eventually catch up with food production. The population hits the subsistence level of food production at the Malthusian trap, shown here at point T.
What happens at the Malthusian trap? Starvation becomes the limiting force for population; the population lives at the margin of subsistence. For Malthus, the long-run fate of human beings was a standard of living barely sufficient to keep them alive. One weakness of his argument is that he failed to take into account the gains in output 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 machines, improved seed, irrigation, and fertilization have made possible huge increases in agricultural output at the same time as the supply of labor was rising.
Agricultural productivity rose rapidly in the United States over the last two centuries, just the opposite of the fall in productivity expected by Malthus. Productivity has continued to expand. Malthus was wrong as well about the relationship between population growth and income. He believed that any increase in income would boost population growth. But the law of demand tells us that the opposite may be true: Higher incomes increase the cost of having children and tend to reduce the number of children people want and thus to slow population growth.
Panel a of Figure We see that the higher the income level, the lower the birth rate. Fewer births translate into slower population growth.
In Panel bwe see that high-income nations had much slower rates of population growth than did middle- and low-income nations over the last 30 years. In Panel bwe see that low-income nations had a much higher rate of population growth during the — period. Hong Kong, for example, has enjoyed dramatic gains in income since the s. Moreover, as this labour force increases in relation to land, capital and other resources, complementary factors available per worker decline.
As a result, unemployment and underemployment increase. Scarcity of land due to rapidly increasing population pushes large number of people to ecologically sensitive areas such as hill sides and tropical forests. It leads to overgrazing and cutting of forests for cultivation leading to severe environmental damage. Moreover, the pressure of rapid growth of population forces people to obtain more food for themselves and their livestock. As a result, they over- cultivate the semi-arid areas.
This leads to desertification over he the long run when land stops yielding anything. Besides, rapid population growth leads to the migration of large numbers to urban areas with industrialization. This results in severe air, water and noise pollution in cities and towns. As population increases, per capital available income declines.
Part 1: Is population growth good or bad for economic development?
People are required to feed more children with the same income. It means more expenditure on consumption and a further fall in the already low savings and consequently in the level of investment. Further, a rapidly growing population by lowering income, savings and investment compels the people to use low level technology which further retards capital formation. Urbanization in UDCs creates such problems as housing, power, water, transport etc.
Besides, growing population threatens permanent environmental damage through urbanization in some rural areas.
So with population growth the land-man ratio is disturbed. Pressure of population on land increases because the supply of land is inelastic. It adds to disguised unemployment and reduces per capita productivity further. As the number of landless worker increases, their wages fall.
This low per capita productivity reduces the propensity to save and invest. As a result, the use of improved techniques in agriculture suffers and the economy is bogged down to the subsistence level.
The problem of feeding the additional population becomes serious due to acute shortage of food products. Thus, the growth of population retards agricultural development and creates a number of other problems discussed above.
A rapidly increasing population leads to an increased demand for food products, clothes, houses etc. But their supplies cannot be increased in the short run due to lack of co-operant factors like raw materials, skilled labour, capital, etc. Consequently, their costs and prices rise which rise the cost of living of the masses. This brings down further the already low standard of living.
Poverty breeds large number of children which increases poverty further, and the vicious circle of poverty, more children and low standard of living continuous. Due to scarcity of resources it is not possible to provide educational, health, medical, transport and housing facilities to the entire population.
There is over-crowding everywhere. As a result, the quality of these services goes down. To provide these social infrastructures requires huge investment.
The growth of population tends to retard the per capita income in three ways: These adverse effects of population growth on per capita income operate more severely if the percentage of children in the total population is high.
A large number of children in the population entail a heavy burden on the economy, because these children simply consume and do not add to the national product. Another factor is the low expectancy of life in underdeveloped countries. It means that there are more children to support and few adults to earn thereby bringing down the per capita income. Whatever increase in national income takes place that is nullified by increase in population.
Thus the effect of population growth is to lower the per capita income. The absolute size of population: According to the census, the total count of the population of Nepal was 1, 50, 22, The size of population in and census was increased and the total number of population was 1, 84, 91, and 2,31,51, respectively.
According to the census, the number of population is 2, 64, 94, Thus, the size of population in Nepal is increasing. The Rate of Population Growth: The geometric rate of population growth in Nepal during was 2.
Although the growth rate appears to be low, it has a tremendous effect on population growth. The age structure of the population is also an important aspect of the problem, for this affects the process of development: Among developing nations, the birth rate was unchanged, while the death rate was down only slightly.
The combined result was a modest increase in the rate of world population growth. Changes were much more rapid in the 20th century. Bythe death rate among developed nations had plunged to about one-quarter of its level, while the birth rate had fallen by half.
In developing nations, death rates took a similarly dramatic drop, while birth rates showed little change.
The result was dramatic world population growth. Less developed nations have begun to make progress, with birth rates falling by a slightly greater percentage than death rates.
Population Growth and Economic Development
The results have been a sharp slowing in the rate of population growth among high-income nations and a more modest slowing among low-income nations. Continued slowing in population growth at all income levels is suggested in Figure Actual and Projected Population Growth". For the world as a whole, it is predicted that population growth will slow to a 1. Actual and Projected Population Growth Population growth has slowed considerably in the past several decades.
Oxford University Press, for the — period, in which categories refer to low, middle, and high human development rankings. Key Takeaways The rate of increase in per capita income roughly equals the rate of increase in income minus the rate of increase in population.
High rates of population growth do not necessarily imply low rates of growth in per capita income. A demographic transition is achieved when rising incomes begin to reduce birth rates and bring population growth in check.
The text gives two main reasons why the Malthusian trap did not occur: How do these two reasons alter Figure China Curtails Population Growth Figure As recently as the early s, China had a relatively high rate of population growth; its population expanded at an annual rate of 2.
Is population growth good or bad for economic development? - IGC Blog
By the s, that rate had plunged to 1. This dramatic drop in the population growth rate was brought about by a strict government policy by which couples are allowed to have only one child. Disincentives have been known to include fines, loss of employment, confiscation of property, demolition of homes, forced abortions, and sterilization.
While the Chinese government has denied that forced abortions and sterilizations are part of its strategy, policies are administered locally, and all of the above means of coercion seem to have been employed at one time or another. If a woman who already has one child becomes pregnant, she will most likely be forced to have an abortion. Although the policy has achieved its desired result—reduced population growth—it has had some horrible side effects. Given a strong cultural tradition favoring having a son, some couples resort to infanticide as a means of eliminating newborn daughters.
When the sex of an unborn baby is determined to be female, abortion is common. Fearful that pro-democracy and human rights activists from other countries might stir up those movements locally, the Chinese government actually designed the Beijing Conference so as to minimize contact between Chinese and foreigners.
There are signs, though, that Chinese officials may have heard the message. The new approach to family planning emphasizes health care, education, and reduction in poverty to encourage women to have fewer children.