Population Growth and
Economic Development: Causes,
Consequences, and Controversies
Lecture 7
The Basic Issue: Is Population
Growth Good or Bad?
1. Argument:
–
Population is a serious problem in developing
countries?
2. Theories:
– Demographic transition
– Malthusian model
– Microeconomic theory of fertility
3. Facts:
– Some empirical evidences
4. Policies:
–
What can developing countries do?
1.1 Population Growth Is A Problem!
• Population and the Global Crisis
– Poverty, low levels of living, malnutrition, ill health,
environmental degradation, etc.
• Population-poverty cycles
– Population growth, saving, per capital income growth
• 7 Negatives
– Lower Y per head
– Poor people bear burden of population growth
– Large population limits educational opportunities
– Health of women is harmed
– Family food is limited
– Environmental degradation occurs
– Illegal international migration and over urbanization
1.2 Population Growth Isn’t A Problem!
• Other Issues
– Underdevelopment
– Resource Depletion and Environmental Destruction
– Population Distribution
– Subordination of Women
• False Issue
– Neocolonial dependence theory
• Desirable
– Consumer Demand
– Economies of Scale
– Labor Supply (sufficient-low cost)
– Non-economic reasons
2.1 The Demographic Transition
• Stage I: high birthrates and death rates
• Stage II: continued high birthrates,
declining death rates
• Stage III: falling birthrates and death rates,
eventually stabilizing
2.2 The Malthusian Model
Criticisms of Malthus’ model
2.3 The Household Model
• The microeconomic household 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
Demand for Children Equation
Cd  f (Y , Pc, Px, tx ), x  1,..., n
Under neoclassical conditions, we would expect:
Cd
0
Y
Cd
0
Pc
Cd
0
Px
Cd
0
tx
3.1 Population Growth:
Numbers
3.2 Population Growth: Structures
3.3 Population Growth: Relations
– Population growth & income
– Population density & income
– Population growth & structure (Number &
Structure)
– Producer & consumer
Income and Population Growth
Population Nature Growth Rate %
4
Series1
Linear (Series1)
Log. (Series1)
3
2
y = -0.6778Ln(x) + 7.1688
R2 = 0.4948
1
0
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
45,000
-1
y = -8E-05x + 2.088
R2 = 0.3562
-2
GNI PPP per capita (1999 US$)
Source: Populat ion Ref erence Bureau, 2001World Populat ion Dat a Sheet , (N=158)
4. Some Policy Approaches
• What developing countries can do:
– Long run: increase the price of child
• opportunity cost of mother’s time
• Cost of educating child
– Short run: control fertility
•
•
•
•
•
•
Persuade people
Family-planning programs
Economic incentives and disincentives
Redistribute population
Coerce people
Raise women’s social and economic status
Cd
0
Pc