ECON 3508
Economic Development
October 16, 2006
Demography and
Development
World Population
I.
Thomas R. Malthus & Population Growth
1. Background on Parson Malthus [1766-1834]
2. Theory of Population Growth:
- people had an uncontrollable urge to procreate!
[This would not diminish as civilization progressed.]
- population growth would continue at a rapid
pace
(“geometrically”)
- Agriculture was subject to limited land and
diminishing returns. (“arithmetic”)
- population would expand to the point where the
“positive checks” would operate.
Famine, Disease and War.
Result: incomes would fall to the
starvation level.
Life would be “nasty, brutish and short” for
the vast majority of human beings.
Is this or was this in fact the case?
An Economic History of the World!
(courtesy of G. Clark, A Farewell to Alms)
Real Output per Worker in England, 1260-1960. (G.Clark)
Real Wage Levels, Europe, (G. Clark)
Was there any escape from this fate?
3. Malthus’ Recommendation:
Establish “Preventative Checks” on
population:
- “Moral Restraint,”
- Delay of marriage
How probable was this?
4. Was Malthus’ Vision Correct?
In general “No,”though some parts of
the world are caught in a “Malthusian
Population Trap.”
e.g. Rwanda? Haiti.
Why or Why Not?
Malthus’ predictions: in large
part unfulfilled:
1. Technology of contraception was
unforeseen;
2. Family Planning;
3. Technological change has postponed the
impacts of serious diminishing returns;
agricultural output has in fact grown more
rapidly than population.
Why?
4. Has the “urge to procreate” declined?
5. Social and sociological impacts of
“Modernization” and Urbanization on birth
rates was unforeseen:
- Higher female labour force participation;
- Higher status for women: increases education and
reduces child-bearing
- Higher costs of raising children in modern urban areas
vis-à-vis agriculture and rural areas
- Cultural factors: more Television etc. etc.
- Less need for children as family labour and old age
security;
Graphical Version of Malthusian Trap
(Class and text, pp. 277-281)
II. Theory of the Demographic
Transition
(See Chart below, on transparency and in Text)
Stage 1:High Birth Rate and Death rate: Population stability
Stage 2: Falling death Rate; Continuing High Birth Rate:
Population increasing faster and faster;
Stage 3: Death Rate DDecline Intensifies; Birth Rate Decline
accelerates; Population Growth continues but decelerates
Stage 4: Low Death Rate and Low Birth Date: Population
Stability
To which I would add
Stage 5: The Current Reality? Death Rates Continue at a low
level; Birth Rates fall further; Population Size Declines
www.ldeo.columbia.edu/edu/dees/V1003/imagres/demographic .transition2
Stage V,
a la Wikipedia!
Explaining the Demographic Transition
Factors Affecting Death Rates:
Factors Affecting Birth Rates:
Usefulness of Approach
III.
The Microeconomic Theory of Fertility
Application of basic microeconomic theory to the
child-bearing decision.
Assumption: children are at least in part an good like
others, providing “consumption” benefits to the parents
and serving also as an investment good (providing and)
Possible economic benefits of additional children:
Old-age security
Expected income from child labour
Costs of additional children:
Opportunity cost of Mothers’ time
Opportunity and actual costs of educating, & looking after
children
How to reduce fertility rates?
IV.
A Note on Demographic Structures:
See:
http://www.census.gov/ipc/www/idbpyr.html
Developing Countries:
e.g.
India
Kenya
China
Chile ….
High Income Countries:
e.g.
Russia
Japan
Canada
• Explain the “Demographic Window of
Opportunity” with the Chinese Case.
• Note the prospective “Aging Population”
phenomenon and reductions in the relative
size of the labour force
V.
Implications of Rapid Population Growth for Economic
Development
1. Impact on Income per Capita:
When population is growing rapidly, economic growth must grow
exceed Population Growth Rates.
2. Effects on Savings
Rapid population growth tends to increase family and national
consumption
3. Investment
Rapid population growth requires that large amounts of resources
must be devoted to investments, which merely
accommodate or keep up with Population.
4. Dependency ratios:
Rapid population growth leads to “bottom heavy” population
pyramids, which means the population of a country of
working age is relatively smaller.
5. Effects on Employment and Unemployment:
Ever-growing cohorts of young people are entering the job
market.
6. Impacts on Income Distribution:
Because family size is highest among the poor, rapid
population growth affects income distribution negatively.
start off in life or to give to them as inheritances.
7. Environmental Impacts
Population growth in many places results in poor rural
people being pushed into ever more marginal and
environmentally-inappropriate farm lands.
8. Rapid Urbanization
VI.
Population Policies
Should governments pursue active population control policies or should
they wait for the “Demographic Transition” to occur automatically?
This has been controversial, for various reasons
Types of Programs:
1. Internal Migration?
A few countries have tried to relieve population pressures in
some areas by migration to other under-populated areas
(Amazonia in Brazil; the outer islands in Indonesia.)
Limited potential plus other problems.
2. International Migration?
The annual population increase in Asia Africa and Latin America
is too large to be relieved significantly via international
migration.
However, for some small countries such as the smaller Englishspeaking Caribbean countries this has been possible’
3. Constructing a policy environment
promoting greater desire for smaller families
Governments can structure a variety of programs and
policies which can change the environment in which
families decide to have children, in ways that will induce
them to reduce family size.
Of especial importance are
–
–
–
–
policies enhancing the status of women,
promoting education in general and especially for girls,
promoting breast-feeding, reducing child labour,
promoting higher labour force participation rates for
women,
– improving social security and pensions (so fewer
children are necessary to look after their aged parents.)
4. Specific Family Planning Programs.
• If families want smaller families due to the types
of factors listed above and discussed previously
in the course. Making family planning facilities
available can have an important impact.
• If families want large families in any case (for
family labour purposes, for old-age security) they
may not be interested in family planning facilities
even if they are available.