World Population Growth Over Time

World Population Over Time

• The information is presented in tabular format, showing population in millions, along with annual increase (%) against time (year).
• Population in 8000 BCE was 5 million.
• Population in 1 CE was 175 million.
• Population in 1000 was 250 million.
• Population in 1500 was 450 million.
• Population in 1800 was 950 million.
• Population in 1850 was 1.25 billion.
• Population in 1900 was 1.65 billion.
• Population in 1950 was 2.536 billion.
• Population in 1960 was 3.033 billion.
• Population in 1970 was 3.7 billion.
• Population in 1980 was 4.458 billion.
• Population in 1990 was 5.331 billion.
• Population in 2000 was 6.145 billion.
• Population in 2010 was 6.958 billion.
• Population in 2018 was 7.621 billion.
• Population forecast for 2050 is 9.8 billion.
• Population forecast for 2100 is 11.2 billion.

World Population Growth: 1950-2050

• A visual representation of population growth from 1950 to 2050, separated into more-developed and less-developed countries.

World Population Distribution

• In 2010, the total world population was 6.89 billion
• Asia and the Pacific accounted for 61%
• Europe 11%
• Africa 15%
• Latin America 8%
• Northern America 5%
• In 2050, the total population is expected to be 9.5 billion
• Asia and the Pacific expected to account for 58%
• Europe is expected to drop to 8%, while Africa is expected to rise to 22%
• Northern America remain at 5%
• Latin America expected to drop to 7%

UN Population Projections (2017)

• The world population is projected to be 8.6 billion by 2030.
• The world population is projected to be 9.8 billion by 2050.
• The world population is projected to be 11.2 billion by 2100.
• Population growth is fastest in developing regions.
• The world population in 2050 is projected to be between 9.5 billion and 10 billion.
• The world population in 2100 is projected to be between 10.0 billion and 12.4 billion.

Population Growth

• Population growth may or may not help economic growth
• Pessimistic views consider it a problem.
• Optimistic views consider it helpful for growth.

Optimistic View

• Population growth creates expansive markets.
• This facilitates economies of scale.
• A larger population implies greater human capital.
• This, in turn, encourages technological process and promotes innovation.

Pessimistic View

• Population growth leads to countries becoming poorer.
• Capital accumulation is spread too thinly across people.
• The contribution of technical progress is overwhelmed.
• Too many people reduce per capita dynamics.

Solow Model

• Population growth formula: L(t+1) = (1 + n)L(t)
• Capital accumulation formula: K(t+1) = sY(t) + (1 − d)K(t)
• Per capita terms are divided by L(t).
• Akt+1 = kt+1 − kt = (s / (1+n))yt − ((d+n)/(1+n))kt
• Long-run equilibrium is achieved when Akt+1 = 0 where: (s/(1+n))y = ((d+n)/(1+n))k

Population Growth and the Solow Model

• The Solow model illustrates the steady-state levels of capital and output in an economy with population growth

Determinants of Population Growth

• Population growth is due to higher fertility.
• Population growth is due to lower mortality.

Momentum of Population Growth

• Momentum is often hidden.
• High birth rates are relatively rigid in the short run.
• Social and economic forces take decades to change.
• Population age structure takes time to change.

Population Pyramid Effects

• A steep pyramid signifies equal-sized cohorts and a stable population.
• Wide pyramids represents more numbers in younger cohorts and rising population due to dynamics

Productivity and Age Composition

• The dependency ratio measures the share of dependents relative to the working-age population
• More workers are generally a positive factor for productivity
• A higher share of dependents is generally a negative factor for productivity
• The demographic dividend describes when a high share of workers compared to dependents makes high growth possible
• The source of population growth matters for productivity

Mechanisms At Play

• A general decline in mortality has no effect on productivity because all age groups are equally affected and the dependency ratio remains unchanged.
• A decline in old age mortality has a negative effect because the number of retirees rise, increasing the dependency ratio and resulting in more mouths to feed.

Fertility Rate Increases

• A rise in the fertility rate results in an initially negative productivity effect as the dependency ratio increases, but there will be a positive effect on the labor supply in a few decades.
• There is a delayed positive effect on growth
• There is effect through younger workforce in a couple of decades
• The positive growth effect gradually dissipates in 3-4 decades

Demographic Transition

• A typical demographic transition includes:
  • A poor and low net population growth rate
  • Transition from poor to high population growth
  • A switch to a high income and low population growth rate
• The population growth rate transition includes:
  • Initially high birth and death rates
  • Switch to high birth rate but low death rates
  • A final state of low birth and death rates

Demographic Transition Western Europe

• The demographic transition in Western Europe is shown across time

Fertility Rate: World Distribution

• The table shows different country examples of fertility rates and how they have changed between 1990 and 2017

Death Rates in Asia

• The graph illustrates death rates per 1,000 population in Asia

Birth Rates in Asia

• The graph illustrates birth rates per 1,000 population in Asia

Asia: Working Age to Non-Working-Age Ratio

• The graph shows the working age to non-working-age ratios across asia

Demographics and Growth

• Bloom-Williamson did research for the World Bank in 1998
• Population growth exceeding the working-age population growth reduces overall growth, seen in East Asia before 1970.
• When population growth is less than working-age population growth raises overall growth, seen in East Asia post 1970
• A negative effect occurs when there is a high dependency ratio because of the number of young people
• The East Asian miracle was partly due to demographic transition

Demographic Divergence

• Economies begin to age at some point
• Asian economies, including China, Taiwan, Korea, and Japan, are experiencing rapid population declines.
• There is a decrease in the working-age population between 2020 and 2050:
  • Korea faces a -35% decrease.
  • China faces a -21% decrease.
  • Taiwan faces a -29% decrease.

World Dependency Ratios: Kenny, 2021 CGD

• This data shows the dependency ratios and old age dependency ratios across different income categories for 1990, 2020, and 2050

Dependency Ratios: Kenny, 2021 CGD

• UN Dependency Ratio Forecasts are shown across countries for 2020 and 2050

World Labor Divergence

• There are worker gaps expected by 2050 so extra workers will need to maintain dependency ratios at 2020 levels
• A gap of 0.7 billion exists in upper-middle and high-income countries.
• The world's working-age population is projected to increase by 986 million between 2020 and 2050.
• Most of the rise occurs in poorer countries.
• There is an estimate of 1.1 billion more workers by 2050 in low and lower-middle-income nations

Policy Challenge in Developed Economies

• Higher dependency ratios in richer countries may cause negative growth effects along with fiscal and security issues.
• Potential solutions include encouraging higher fertility rates, extending retirement ages, greater automation, and greater off-shoring
• The growing service demand for an aging population a factor

Policy Challenge in Developing Economies

• High population and worker growth
• The need to provide productive employment
• Most job creation is currently in low productivity informal or self-employed sector
• Excess demand exists for good jobs
• There is a challenge to avoid turning demographic dividend into curse

Migration

• Excess demand exists for workers in developed economies
• There is excess supply of workers in developing countries
• The solution may be to move people from excess supply to excess demand regions
• Both workers and the recipient countries can gain
• Temporary worker programs

Theories of Fertility

• Malthusian population trap model
• Household fertility choice model

Malthusian Model (1798)

• Population continually tends to increase
• Population growth is constrained by food supplies.
• Food supply growth is limited by diminishing returns due to fixed land.
• Per capita income falls to subsistence level due to declining food supply.
• The only escape is 'moral restraint'.

Malthusian Population Trap

• The Malthusian Population Trap Model describes the relationship between population growth rate, total income growth rate and income per capita

Criticisms of Malthus

• There is an overlooked impact of technological progress
• There is no data correlation between population growth and levels of per capita income
• Income distribution matters more for aggregate fertility rates
• The Microeconomics of family size and consideration of individual incentives were overlooked
• The model may be more relevant for pre-Columbian Americas

Fertility as Household Choice

• The number of children is a household decision.
• Decision based on several factors which include income, preference for children, and the costs of raising kids
• Children are seen as an investment good that is a source of labor for family enterprise in addition to providing post-retirement care and security

Demand for Children

• A demand for children function: Cd = f (Y, Pc , Px , tx )
• Y is household income
• Pc is the "price" of children (the costs minus benefits through income transfer and old-age care)
• Px is the price of goods.
• tx is the tastes for goods relative to children

Demand for Children

• There are comparative static effects
• ∂Cd / ∂Y > 0
• ∂Cd / ∂Pc < 0
• ∂Cd / ∂Px > 0
• ∂Cd / ∂tx < 0
• These effects are expected through optimal household behavior

Female Employment Opportunities

• Rising female employment opportunities
  • Raises household income
  • Raises cost of kids (opportunity cost)
  • Makes budget line steeper
  • Shifts budget line outwards
  • Raises goods consumption and can also reduce fertility

Empirical Evidence on Fertility

• Rising female employment opportunities associated with lower fertility
• Greater female school attendance associated with lower fertility
• Decline in child mortality associated with falling fertility
• Related to attaining target number of kids with lower fertility