Ecomomics evelopment 10th y p todaro and smith chapter 06

Chapter 6
Population Growth
and Economic
Development:
Causes,
Consequences,
and Controversies

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Estimated World Population Growth

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World Population Growth, 1750-2050

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World Population Growth Rates
and Doubling Times

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World Population Distribution by Region,
2003 and 2050

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World Population Distribution

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Fertility Rate for Selected Countries
1970 and 2006

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Population Pyramids
•

LDCs population pyramid is truly pyramid-shaped with 40% younger than 19 years and less than 5% over 65.
Of the youth, 2 billion are 19 and younger and 400 million between 15-19

•

MDCs population structure is more like a cylinder with many middle-aged and elderly individuals

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Population Pyramids:
Ethiopia vs. U.S., 2005

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Hidden Momentum of Population Growth
• Family planning takes many years to achieve
two-child family and eventually replacement
fertility because today’s children are future
parents
• In Nigeria, If family planning began in 1990
• Two-child family may achieve in 2035 (45 years)
• Replacement fertility would eventually reach in
2150 (115 years)
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Hidden Momentum of Population Growth

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The Demographic Transition
•

Stage I: High birthrates and death rates

•

Stage II: Continued high birthrates; declining death rates because of improved medicine

•

Stage III: Falling birthrates and death rates, eventually stabilizing due to improved medicine and decline in the
fertility rate

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Demographic Transition in
Western Europe

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Demographic Transition in LDCs

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The Malthusian Trap
•

Population grows at a geometric ratio

(e.g., 1, 2, 4, 8, 16, 32, etc.)

•

Food supply increases at an arithmetic ratio

•

Hence, hunger, starvation, and death shall follow

•

Remedy is to keep population growth in check

(e.g., 1, 2, 3, 4, 5, etc.)

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The Malthusian Trap
Income growth rate

Growth rate (%)

Growth

5
4

B

3

Population growth rate

C
Trap

Trap

2
1

A

Growth
0

Y0 Y1

Income per capita

Y2

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Wesley. All rights reserved.

Y3

Y4

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Criticism of The Malthusian Trap
•

Rapid income growth due to technological advancement

•

Greater food production due to land-intensive technology and application of modern farm inputs

•

Economic growth faster than population growth, resulting in the rise of per capita income over time

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Criticism of The Malthusian Trap
Growth rate (%)
5

Income growth rate

4
3

Population growth rate

2
1
0
-1
Copyright

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Income per capita

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Cross-National Evidence
•

Many LDCs have been able to lower population growth rate while increasing income per capita (e.g., China,
Sri Lanka, Chile, Singapore)

•

Still, there are countries with low or even negative rate of economic growth, but high rate of population
growth (e.g., Kenya. Congo, Philippines, Colombia, Venezuela)

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Microeconomic Theory of Fertility
Demand for Children Equation

Cd = f (Y , Pc, Px, tx ), x = 1,..., n
Where
Cd is the demand for surviving children
Y is the level of household income
Pc is the “net” price of children

Px is price of all other goods
tx is the tastes for goods relative to children
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Microeconomic Theory of Fertility
Demand for Children Equation

Cd = f (Y , Pc, Px, tx ), x = 1,..., n
Under neoclassical conditions, we would expect:

∂Cd
>0
∂Y

∂Cd
>0
∂Px

∂Cd
<0
∂Pc

∂Cd
<0
∂tx

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Microeconomic Theory of Fertility
•

In LDCs, the demand for children is high because the cost of raising children is low and they add to the
family’s workforce to generate income

– In LDCs, children are “investment goods”
– In MDCs, children are “consumer goods”

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Policies of Fertility Reduction
•

Improve female education, and economic and social role and status

•

Provide of female non-agricultural wage employment

•

Rise in family income

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Policies of Fertility Reduction
•

Reduction in infant mortality, hence demand for replacement children

•

Provide old-age income security

•

Expand schooling opportunities

•

Establish family planning programs

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Consequences of High Fertility
Population growth isn’t a real problem. The

problems are
• Poverty and lack of development
• World resource depletion and environmental
destruction
• Uneven distribution of population
•Copyright
Subordination
of women
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AddisonWesley. All rights reserved.

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