November 21, 2011
Kyoto University
Junichi Mori
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“Population Growth is still an issue.”
UNPF, Sate of World Population 2004, P8 http://www.unfpa.org/upload/lib_pub_file/327_filename_en_swp04.pdf
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http://www.worldbank.org/depweb/english/modules/social/pgr/map1a.html
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 KUINEP
The Characteristics of Population Growth
Developed countries Developing countries
Average 1%
About 2.5%
Endogenous phenomenon by economic growth
Exogenous phenomenon by importation of health & medical technologies
In an economic model, an endogenous change is one that comes from inside the model and is explained by the model itself.
An exogenous change is one that comes from outside the model and is unexplained by the model.
日本語： endogenous ( 内生的） exogenous ( 外生的）
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 KUINEP
Population growth and economic development
Exogenous ( 外生的）
Endogenous （内生的）
Exogenous population explosion is not paralleled by increase in employment and income.
 Developing economics face with the serious problem of resource exhaustion, economic degradation, and destitution.
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 KUINEP
Correlation between population growth and economic growth 人口と経済成長の相関関係
• Optimum population growth  acceleration of economic growth 経済成長の加速
• Over and under population growth  constraint on economic growth 経済成長の制約
• Population growth, which occurs in parallel with
GNP growth would result in:
- further acceleration of economic growth
- enlargement of markets including products market and labor market
- induction into specialization
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 KUINEP
Negative Influence of population growth on economy
人口成長が与える負の影響
If the population growth of a country is faster than the growth rate of GNP, then it has negative impact on the economy.
population growth  GNP per capita decreases
 purchasing power decreases substantially
 shrinkage of various markets including products and labor market
 vicious circle (shown as in Malthus model)
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 KUINEP
1. Natural increase （自然的増加）
- The natural rate of Population growth (NR)
= the birth- rate (BR) - the death-rate (DR)
2. Social increase （社会的増加）
Migration
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The Theory of Demographic Transition
BR
DR
1
2
3
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 KUINEP
Three phases of population growth
Change in the birth- and death rates in the UK
Hayami (2005)
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Why is the theory of demographic transition important?
 To look for patterns which help explain changes in population growth rate
 To help predict changes in population growth rate and effective ways of controlling it
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The population of Japan since the Jomon era
Source: 平成 16 年 少子化白書、 http://www8.cao.go.jp/shoushi/whitepaper/w-2004/html-h/index.html
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 KUINEP
Japan’s demographic transition
JICA (2003)
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


A period of high fertility rate and high mortality rate until 1870
A period of high fertility rate and low mortality rate between 1870 and 1960
A period of low fertility rate and low mortality rate since 1960


Rapid increase in the birthrate from 1945-1950
Decline in the death-rate from 1945-1960
Japan ’ s demographic transition was completed around 1949.
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15

 Hayami (2005), Development Economics p 73-78
N
N
G
(W)
G
W
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The household utility maximization model （家計
の効用最大化モデル）


Hayami (2005), Development Economics p 73-78
In order to understand this model, the concept of “ utility ” should be understood.


“ A central principle of microeconomics is that households and firms optimize- they do the best they can for themselves given their objectives and the constraints they face.
In microeconomic models, households choose their purchases to maximize their level of satisfaction, which economists call utility, and firms make production decisions to maximize their profits.
”
(Mankiw, Gregory, “ Macroeconomics 5 th Edition p12)
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 Utility is the abstract measure of satisfaction or happiness that consumers receive from money or goods they own or consume.
Utility
0
Amount of Goods
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 Instinctive pleasure, such as love of children and satisfaction of having heirs.
 Expected income from children for the household
 Security for parents during old age
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Utility b c a
Number of
Children
Marginal Utility a b c
Number of Children
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Marginal Utility
MU0
MU0
Number of Children
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 Physical and psychological hardships in bearing and rearing children
 Costs paid for child-bearing and rearing
 Opportunity costs* of parents ’ labor used for childbearing and rearing
*opportunity costs of some items are what one has to give up to get that item.
(Gregory Mankiw, “ Principles of Economics 3 rd Edition ” 2004, p51)
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Marginal Disutility
MD0
MD0
Number of Children
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1 st phase:
The initial equilibrium is found.
Marginal Utility / Disutility
MU0
MD0 n0
MU0
Number of Children
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2 nd phase: Shift of marginal utility and disutility line
2nd Phase of demographic change
 Rightward shift of MUL
 Employment and income earning opportunity rises
 Social security and insurance market do not develop at this phase
 Upward shift of MDL


Since labor law and primary school system not yet established, cost to rearing children doesn ’ t rise so much
Opportunity cost of mothers to rear children rises
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2nd phase: Shifts of utility and disutility lines
Marginal Utility / Disutility
MU0
MU1
MD1
MD0
MD1
MD0 n0 n1
MU0
MU1
Number of Children
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3 rd Phase: Leftward shift of MUL and upward shift of MDL
 Leftward shift of MUL


Reduced death rate reduced the utility of having children
Increased social mobility decreases possibility that children live with parents together
 Further upward shift of MDL


Education system develops and education cost of children rises
Opportunity cost of mothers ’ to rear children rises very much
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Later phase:
Shift of utility and disutility lines
Marginal Utility / Disutility
MU0
MU2
MU1
MD2
MD1
MD0
MD2
MD1
MD0 n2
MU2 n0 n1
MU0
MU1
Number of Children
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Demographic Change in East Asia
 Can we explain the demographic change in East Asia by using the household utility maximization model?



Which countries belong to the early phase of MUL analysis?
Which countries belong to the 2 nd phase of development?
Which countries belong to the 3 rd phase of development?
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Please consider how to explain by using the utility and disutility lines
 In China, parents should pay additional service fees, like school expenses, when they get a second child. What kind of effects this regulation may have on parents ’ behavior.
 In Bangladesh, the United Nations try to prevail the primary education by offering free lunch for children in the school. What kind of effects it may have on demographic change in the country?
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Please explain the two cases described in the former slide.
Marginal Utility / Disutility
MU0
MD0 n0
MU0
Number of Children
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Hayami, Yujiro, “ Development Economics ” 2005, London 
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
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Oizumi, Keiichiro, The effect of aging society in ASEAN 4 and China on macro economic development ( in Japanese)
大泉啓一郎 「 ASEAN4 と中国の少子高齢化とマクロ経済に及ぼす影響」 日
本総研 RIM 2004 Vol ４
Mankiw, Gregory “Macroeconomics 5th Ediction” 2003 、 New York
Japan International Cooperation Agency (JICA), “ Second Study on
International Cooperation for Population and Development New Insights from the Japanese Experience ” , November 2003
 http://www.jica.go.jp/english/resources/publications/study/topical/ssic/pdf/ssic_03
.pdf
 East-West Center, The Future of Population in Asia, Honolulu,
 http://www.eastwestcenter.org/publications/search-for-publications/browsealphabetic-list-of-titles/?class_call=view&pub_ID=1300
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

David Canning, The impact of Aging on Asian Development,. ADBI web site http://www.adb.org/AnnualMeeting/2007/seminars/presentations/dcanningpresentation.pdf
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