Economic D e v e l o p m e n t

Population Growth and

Economic Development:
Causes, Consequences
and Controversies
PRES EN T ED B Y: G RO U P 4
5.1 The Basic
Issue: Population
Growth a n d the
Quality of Life
PO PU LA T I O N G R O W T H A N D EC O N O M I C
D EV ELO PM EN T : C A U S ES , C O N S EQ U EN C ES
A N D C O N T RO V ERS I ES
Population Growth
Population growth is known as one
of the driving forces behind
environmental problems, because
the growing population d e m a n d s
more and more (non-renewable)
resources for its own application.
Quality of Life
According to the World Health Organization
(WHO), quality of life is defined as "the individual's
perception of their position in life in the context of
the culture a n d value systems in which they live
a n d in relation to their goals." Someone's quality
of life is the extent to which their life is
comfortable or satisfying. There is an
interrelationship between population a n d quality
of life. There is an adverse effect on the quality of
life if the population growth rate is high.
In 2013, the world’s population
reached a b o u t 7.2 billion
people. In that year the United
Nations Population Division
projected that population
would rise to a b o u t 8.1 billion in
2025 a n d reach a b o u t 9.6
billion by the year 2050.
5.3 DEMOGRAPHIC TRANSITION
Finally, even m o r e significant, is
rapid population growth as serious
a p r o b l e m as m a n y people believe
or is it a manifestation of m o r e
f u n d a m e n t a l problems of
underdevelopment a n d the unequal
utilization of global resources
between rich a n d poor nations as
others argue?
Every year, m o r e than 75 million people are
being a d d e d to the world’s population.
Almost all of this net population i n c r e ase -
97%-is in developing countries
But the p r o b l e m of population growth is not
simply a p r o b l e m of numbers. It is a
p r o b l e m of h u m a n welfare a n d of
development.
Rapid population growth c a n have serious
consequences for the well -being of all
humanity.
5.3 DEMOGRAPHIC
TRANSITION
PO PU LA T I O N G RO W T H A N D EC O N O M I C
D EV ELO PM EN T : C A U S ES , C O N S EQ U EN C ES
A N D C O N T RO V ERS I ES
3 Stages of Demographic
Transition
1.Pre-Transition

5. 3 D EM O G RA P H IC
2. Early Transition

3. Early Transition

T RA N S ITIO N
Replacement Fertility
The number of births per w o m a n that would result in stable population
levels.
5.3 DEMOGRAPHIC TRANSITION
5.3 DEMOGRAPHIC TRANSITION
5.4 The Cause of
High Fertility in
Developing
Countries: The
Malthusian a n d
Household Models
PO PU LA T I O N G RO W T H A N D EC O N O M I C
D EV ELO PM EN T : C A U S ES , C O N S EQ U EN C ES
A N D C O N T RO V ERS I ES
The Malthusian Model
Reverend Thomas Malthus: put forward a theory of the

5. 4 T H E C A U S E O F H IG H F E R T IL IT Y IN
relationship between Population growth a n d Economic
Development

M A LT H U S IA N A N D H O U S EH O LD
D E V E LO P IN G C O U N T R IE S : T H E
In 1978 Malthus postulated the following
1. Population tends to grow at a geometric rate, doubling
every 30 to 40 years
2. Food supplies only expand at an arithmetic rate due to

M O D ELS
diminishing returns to land (fixed f a c t o r )
 Malthusian
Population Trap
Low-level equilibrium
population trap
5. 4 T H E C A U S E O F H IG H F ER T IL IT Y I N

Countries would be
M A LT H U S IA N A N D H O U S EH O LD
D EV ELO P I N G C O U N T R IE S : T H E

t r a p p ed in low p e r -
c a p i t a incomes ( p e r
c a p i t a food), a n d
population would
M O D ELS PA N Y

stabilize at a
subsistence level
 Criticisms of the
M a lthusia n
Model
I m p a c t of technological
5. 4 T H E C A U S E O F H IG H F ER T IL IT Y I N

progress
M A LT H U S IA N A N D H O U S EH O LD

Currently no positive
D EV ELO P I N G C O U N T R IE S : T H E

correlation between
population growth a n d
levels of per c a p i t a income
in the d a t a
M O D ELS PA N Y

Microeconomics of family
size; individual a n d not
aggregate
variables
The Household Theory Fertility
The decision taken at the mi cro e co n o mi c level by
households

5. 4 T H E C A U S E O F H IG H F E R T IL IT Y IN
The Dema n d for Children in Developing Countries

M A LT H U S IA N A N D H O U S EH O LD
D E V E LO P IN G C O U N T R IE S : T H E
First two or three as “consumer goods”
Additional children as “investment goods”:
Work on family farm, microenterprise

M O D ELS
Old a g e security motivation
5.4 THE CAUSE OF HIGH FERTILITY IN DEVELOPING
COUNTRIES: THE MALTHUSIAN AND HOUSEHOLD
MODELS
5.4 THE CAUSE OF HIGH FERTILITY IN DEVELOPING
COUNTRIES: THE MALTHUSIAN AND HOUSEHOLD
MODELS
M icroeconom ic
Theory of
Fertility: An
Illustration
D e m a n d for Children
Equa tion

5. 4 T H E C A U S E O F H IG H F ER T IL IT Y
I N D EV ELO P I N G C O U N T R IES : T H E
M A LT H USIAN A N D H O US EHO LD
Where
C d is the d e m a n d for surviving children
Y is the level of household i n c o m e
Pc is the “net” price of children
Px is price of all other g o o d s

M O D ELS
tx is the tastes for goods relative to children
The higher the household
income, the greater the d e m a n d
for children.
The higher the net price of
children, the lower the quantity
demanded.
The higher the prices of all other
g o o d s relative to children, the
greater the quantity of children
demanded.
The greater the strength of
tastes for g o o d s relative to
children, the fewer children
demanded.
The D e m a n d for Children in Developing
Countries
Children in poor societies are seen partly as e c o n o mic investment goods in that
there is an expected return in the fo rm of both child labor a n d the provision of
financial support for parents in old age.
However, in m a n y developing countries, there is a strong intrinsic psychological

5. 4 T H E C A U S E O F H IG H F E R T IL IT Y IN
a n d cultural determinant of family size, so the first two or three children should

M A LT H U S IA N A N D H O U S EH O LD
D E V E LO P IN G C O U N T R IE S : T H E
be viewed as “consumer” goods for which d e m a n d m a y not be very responsive
to relative price changes.
Households in developing countries generally d o not a c t in a “unitary” ma n n e r
depicted with this traditional model.
Instead, m e n a n d w o m e n have different objective functions; for example,
husbands m a y prefer to have mo re children than wives. Household behavior is

M O D ELS
then explained as a result of bargaining between husbands a n d wives. Although
the b r o a d i m p a c t s we have just described continue to hold, the process includes
increased bargaining power of women.
Some Empirical
Evidence

5. 4 T H E C A U S E O F H IG H F E R T IL IT Y IN
Statistical studies in a b r o a d

M A LT H U S IA N A N D H O U S EH O LD
D E V E LO P IN G C O U N T R IE S : T H E
spectrum of developing countries
have provided support for the
econ omic theory of fertility.

M O D ELS
Implications for
Development a n d Fertility.
Fertility lower I f …
Women’s Education, role, a n d status
Female nonagricultural w a g e e m p l o y m e n t
Rise in family income levels
Reduction in infant mortality
Development of o l d - a g e a n d social security
Expanded schooling opportunities
5.5 The
consequences
of high
fertility: Some
Conflicting
Perspectives
PO PU LA T I O N G RO W T H A N D
EC O N O M I C D EV ELO PM EN T :
C A U S ES , C O N S EQ U EN C ES A N D
C O N T RO V ERS I ES
It’s not a real problem

T H E P R O B LEM IS N O T F O R MA N Y D EV ELO P IN G
P O P U LA T IO N C O U N T R IE S A N D
G R O W T H B U T O T H ER R EG IO N S , P O P U LA T IO N
G R O W T H IS IN FA C T
IS S U ES .
D ES IR A B LE.
P O P U LA T IO N G R O W T H IS A
F A LS E IS S U E D ELIB ER A T ELY
C R EA T ED B Y D O M I N A N T R IC H -
C O U N T R Y A G EN C IE S A N D
I N S T IT U T IO N S T O K EEP
D EV ELO P I N G C O U N T R IE S I N
T H EIR D EP EN D EN T C O N D IT IO N .
Other Issues:
M A N Y O B S ERV ERS F RO M B O T H R I C H A N D P O O R N A T I O N S
A RG U ET HA T T H E R EA L PRO B LEM I S N O T PO PU LA T I O N
G RO W T H PER S E B U T O N E O R A LL O F T H E FO LLO W I N G FO U R
I S S U ES .

1. U N D ERD EV ELO PEN T

I F C O RREC T ST RA T EG I ES A RE PU RS U ED A N D
LEA D T O H I G H ER LEV ELS O F LI V I N G , G REA T ER
S ELF- EST EEM , A N D EX PA N D ED FREED O M ,
PO PU LA T I O N W I LL T AK E C A RE O F I T S ELF.
EV EN T UA LLY, I T W I LL D I SA PPEA R A S A PRO B LEM ,
A S I T H A S I N A LL O F T H E PRES EN T
EC O N O M I C A LLY A D V A N C ED N A T I O N S .
2. World Resource Depletion a n d
Environmental Destruction.
Population c a n only be an e co n o m i c p r o b l e m in
relation to the availability a n d utilization of scarce
natural a n d material resources.
3. Population Distribution
According to this third argument, it is not the nu mber
of people per se that is causing population problems
but their distribution in space.
4. Subordination of W o m e n
Perhaps m o st important, as noted previously,
w o m e n often bear the disproportionate burdens of
poverty, poor education, a n d limited social mobility.
In m a n y cases, their inferior roles, low status, a n d
restricted access to birth control are manifested in
their high fertility.
It’s a Deliberately Contrived False Issue
The second m a i n line of a r g u m e n t
denying the significance of population
growth as a major development problem
is closely allied to the neocolonial
dependence theory of underdevelopment
discussed in Chapter 3.
It’s a Desirable Phenomenon
A more conventional e co n o mi c a r g u m e n t
is that of population growth as an
essential ingredient to stimulate economi c
development. Larger populations provide
the needed consumer d e m a n d to
generate favorable economies of scale in
production, to lower production costs, a n d
to provide a sufficient a n d l o w - c o s t labor
supply to achieve higher output levels.
It Is a Real Problem
- P O S IT IO N S S U P P O R T IN G T H E N EED T O C U R T A IL
P O P U LA T IO NG R O W T H B EC A U S E O F T H E N EG A T I V E
EC O N O M I C , S O C IA L, A N D EN V IR O N ME N T A L
C O N S EQ U EN C ES A R E T Y P IC A LLY BA S ED O N O N E O F T H E
F O LLO W IN G T H R EE A R G U ME N T S .

T H E EX T R E M I S T
A R G U ME N T :
P O P U LA T IO N A N D
G LO BA L C R IS IS
T H E T H EO R ET IC A L
A R G U ME N T :
P O P U LA T IO N - P O V E R T Y
C Y C LE S A N D T H E N E E D
F O R F A MIL Y - P LA N N IN G
P R O G RA MS
The Extremist Argument: Population
a n d Global Crisis
The extreme version of the population as p r o b l e m
position a t t e m p t s to attribute almost all of the
world’s e c o n o m i c a n d social evils to excessive
population growth. Unrestrained population
increase is seen as the maj or crisis facing
humankind today. It is regarded as the principal
cause of poverty, low levels of living, malnutrition, ill
health, environmental degradation, a n d a wide
array of other social problems.
The Theoretical Argument:
Population-Poverty Cycles a n d the
need for Family-Planning Programs
The population -poverty cycle theory is the
m a i n a r g u m e n t a d v a n c e d by economists
who hold that too rapid population growth
yields negative e c o n o m i c consequences
a n d thus should be a real concern for
developing countries.
Other Empirical Arguments:
Seven negative Consequences of
Population Growth According to the latest
empirical research, the potential negative
consequences of population growth for
economic development c a n be divided into
seven categories: its i m p a c t on economic
growth, poverty a n d inequality, education,
health, food, the environment, a n d
international migration.
1. Economic Growth.
Evidence shows that although it is not the
culprit behind ec onom i c stagnation, rapid
population growth lowers per c a p i t a
income growth in m os t developing
countries, especially those that are already
poor, dependent on agriculture, a n d
experiencing pressures on land a n d
natural resources.
2. Poverty a n d Inequality.
Even though a g g r e g a t e statistical
correlations between measures of
poverty a n d population growth at
the national level are often
inconclusive, at the household level
the evidence is strong a n d
compelling.
3. Education.
Although the d a t a are sometimes
a m b i g u o u s on this point, it is generally
agreed that large family size a n d low
incomes restrict the opportunities of
parents to edu ca te all their children. At the
national level, rapid population growth
causes educational expenditures to be
spread m o r e thinly, lowering quality for the
sake of quantity.
4. Health.
High fertility harms the health of
mothers a n d children. It increases
the health risks of pregnancy, a n d
closely s p a c e d births have been
shown to reduce birth weight a n d
increase child mortality rates.
5. Food.
Feeding the world’s population is m a d e
more difficult by rapid population growth—a
large fraction of developing country food
requirements are the result of population
increases. New technologies of production
must be introduced more rapidly, as the
best lands have already been cultivated.
International food relief p r o g r a m s b e c o m e
more widespread.
6. Environment.
Rapid population growth contributes
to environmental degradation in the
form of forest encroachment,
deforestation, fuel w o o d depletion,
soil erosion, declining fish a n d
animal stocks, inadequate a n d
unsafe water, air pollution, a n d urban
congestion.
7. International Migration.
Many observers consider the
increase in international
migration, both legal a n d illegal,
to be one of the major
consequences of developing
countries’ population growth.
 That's All
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P R ES EN T ED B Y : G R O U P 4