Population Growth and Economic Development PDF

POPULATION GROWTH AND ECONOMIC DEVELOPMENT GROUP 2 Abante, Kimberly T. Ferrer, Alexa B. Viana, Althea Marie A. Manibo, Lebron James 1 In 2017, the world’s population reached 7.6 billion. United Nations Population Division World Population Projections 20...

POPULATION GROWTH AND ECONOMIC DEVELOPMENT GROUP 2 Abante, Kimberly T. Ferrer, Alexa B. Viana, Althea Marie A. Manibo, Lebron James 1 In 2017, the world’s population reached 7.6 billion. United Nations Population Division World Population Projections 2030: 8.6 billion 2050: 9.8 billion 2100: 11.2 billion Most growth will occur in the developing world. 2 IMPACT OF POPULATION GROWTH Not just in numbers but also the human welfare and development. Rapid growth can harm: Living Standards: Incomes, health, and education Well-Being: Capabilities, self-esteem, respect, and dignity Freedom: Choice and opportunities for individuals 3 Population Trends Overview Historical Growth Rates 1950: 1.7 billion in developing countries (~66% of global population) Pre-300 Years Ago: ~0.002% annual growth 2050 Projection: 1750: Growth rate increased to 0.3% Developing countries: >8 billion (~88% of global population) 1950s: Accelerated to ~1% Least-developed countries: 200 million to 2 billion (10x increase) 1970 Peak: ~2.35% Current Rate: ~1.2% globally; Africa: 2.3% Developed Countries: Minimal growth expected by 2050, even with immigration. 4 THE REASON FOR THE SUDDEN CHANGE IN OVERALL POPULATION TRENDS Historical Influences: Population change was historically affected by famine, disease, and war, leading to high death rates. 20th Century Changes: Advances in: Medicine Nutrition Sanitation - resulted in significantly lower death rates. Current Trends: High Population Growth: Driven by rapid decline in mortality, especially in developing countries. Birth Rates: Remain high in the least-developed countries, slowing the transition to lower rates. 5  More than 3/4 of the world’s people live in developing countries; fewer than 1/4 lives in an economically developed nation. 6 Rate of population increase The growth rate of a population, calculated as the natural increase after adjusting for immigration and emigration. Natural increase The difference between the birth rate and the death rate of a given population. Net international migration The excess of persons migrating into a country over those who emigrate from that country. Crude birth rate The number of children born alive each year per 1,000 population (often shortened to birth rate). Death rate The number of deaths each year per 1,000 population 7  TOTAL FERTILITY RATE DECLINE IN FERTILITY RATES (TFR) Fertility began to fall around 1970, coinciding with peak world The number of population growth. children that would Examples of Decline (1970-2017): be born to a woman Bangladesh: 7 to 2.1 births/woman if she were to live to Jamaica: 5.3 to 2 the end of her Colombia: 5.3 to 1.8 childbearing years Mexico: 4.9 to 2.2 and bear children in Current Status: Births per woman has been falling less accordance with the rapidly in Africa than once expected in Africa due to educational prevailing age- disruptions and conflict. specific fertility rates. 8  IMPROVEMENTS IN HEALTH AND LIFE EXPECTANCY LIFE Health Advances: EXPECTANCY Vaccination campaigns for malaria, smallpox, yellow fever, AT BIRTH cholera. The number of Improved public health facilities, clean water, nutrition, and years a newborn education. child would live if Impact on Death Rates: subjected to the Decreased by up to 50% in parts of Asia and Latin America. mortality risks Over 30% reduction in Africa and the Middle East. prevailing for the Life Expectancy (2017): population at the Sub-Saharan Africa: 61 years time of the child’s High-Income Countries: Nearly 81 years birth. East Asia: 76 years, Latin America: 75 years 9  UNDER-5 UNDER-5 MORTALITY RATE REDUCTION MORTALITY Significant Reductions (1990-2018): RATE South Asia: 130 to 42 per 1,000 Deaths among East Asia & Pacific: 57 to 15 per 1,000 children Latin America & Caribbean: 55 to 16 per 1,000 between birth Sub-Saharan Africa: 180 to 78 per 1,000 (lagging and 5 years of age per 1,000 progress) live births. 10 YOUTH DEPENDENCY RATIO The proportion of young people under age 15 to the working population aged 16 to 64 in a country COMPARATIVE AGE STRUCTURES AGE STRUCTURE AND DEPENDENCY Youthful Population in Developing RATIOS Countries: Workforce Age Group (15-64): Children under 15: U.S.: 65%, with 19% under 15, 16% over 65. Low-income: 42% UK: Similar ratios. Lower-middle income: 30% Euro Area: 20% over age 65; Japan: 28%. High-income: 17% Sub-Saharan Africa (2018): Youth Dependency Ratio: 54% workforce; only 3% over 65. High in developing countries, requiring more support from the workforce. 11 HIDDEN MOMENTUM OF POPULATION GROWTH The phenomenon whereby population continues to increase even after a fall in birth rates because the large existing youthful population expands the population’s base of potential parents. Youth Dependency Challenges: Rapid population growth leads to higher dependency ratios. Greater burden on the workforce to support dependents. Reasons for Momentum: a. Slow Change: High birth rates take time to decrease; societal influences are not easily altered. b. Age Structure: Many low- and middle-income countries have a large youth population, leading to increased future births even with lower fertility rates. 12 POPULATION PYRAMID Growth Dynamics: Even if new parents have fewer A graphic depiction of the children, the larger number of couples will still lead to age structure of the population, with population increases. age cohorts plotted on the vertical axis and either population shares or Changes in Population Pyramids (1965 vs. 2016) numbers of males and females in Fertility Trends: each cohort on the horizontal axis. Low-income countries in 2016 resemble Steep Pyramid: Indicates middle-income countries in 1965. stable population. Middle-income countries in 2016 reflect high- Wide Base: Suggests future income countries in 1965. population growth as large Implications: Fertility declines in developing young cohorts reach regions lead to demographic transitions. adulthood. 13 DEMOGRAPHIC DIVIDEND: Opportunity for economic growth with fewer dependents and more working-age individuals. Can lead to increased productivity and investment in human capital. Challenges: High youth unemployment can lead to social unrest. Aging populations in high-income countries increase support needs for the elderly. 14 6.3 Demographic Structure and the Demographic Transition Demographic Transition *The phasing-out process of population growth rates from a virtually stagnant growth stage, characterised by high a famous concept in economic birth rates and death rates through a rapid-growth stage with high birth rates demography that portrayed the and low death rates to a stable, low- process by which fertility rates growth stage in which both birth and death rates are low.* eventually decline to low and stable levels  Three Stages of Modern Population History Stage 1 Stage 2 Stage 3 the beginning of a decline a marked reduction in in fertility; eventually, countries for centuries mortality that gradually falling birth rates had stable or very slow- raised life expectancy converged with lower growing populations from under 40 years to death rates, leaving little over 60 years or no population growth.  Replacement fertility The number of births per woman that would result in stable population levels. The demographic transition involves a shift from high birth rates to a replacement fertility level of about 2.05 to 2.1 births per woman in developed countries, where most women survive to the mean age of childbearing. In developing countries with lower survival rates, replacement fertility can exceed 3 births per woman. 6.4 THE CAUSES OF HIGH FERTILITY IN DEVELOPING COUNTRIES: THE MALTHUSIAN AND HOUSEHOLD MODELS MALTHUSIAN POPULATION TRAP The threshold population level anticipated by Thomas Malthus (1766–1834) at which population increase was bound to stop because life-sustaining resources, which increase at an arithmetic rate, would be insufficient to support human population, which would increase at a geometric rate. 18  6.4.2 CRITICISMS OF THE MALTHUSIAN MODEL 1. They do not take adequate account of the role and impact of technological progress. 2. They are based on a hypothesis about a macro relationship between population growth and levels of per capita income that does not stand up to empirical testing of the modern period. 3. They focus on the wrong variable, per capita income, as the principal determinant of population growth rates. A much better and more valid approach to the question of population and development centres on the microeconomics of family size decision making in which individual, and not aggregate, levels of living become the principal determinant of a family’s decision to have more or fewer children. 19 WHAT WE CAN LEARN FROM THE MALTHUSIAN MODEL First, many people still believe the Malthus trap holds in poor countries today, despite the recent evidence; and people working in the development economics field should understand the model and the elements of it that do not currently apply so that they can engage the debate effectively. Second, the evidence indicates that such traps have occurred in the historical past and may have been factors in population collapses, including in the pre-Columbian Americas. 20 WHAT WE CAN LEARN FROM THE MALTHUSIAN MODEL Third, appreciating that the Malthus model more generally prevailed between the agricultural revolution until the industrial revolution highlights the essential roles of scientific and technological progress in modern economic growth, with its ongoing effects on raising productivity. These include efforts to continue steady and sustainable rises in agricultural productivity; and encompass social dimensions, including increases in women’s empowerment and freedom to choose, along with their incomes, reducing the old-age security motive while 21 increasing the opportunity costs of high fertility. 6.4.3 THE MICROECONOMIC HOUSEHOLD THEORY OF FERTILITY Cd = f1Y, Pc, Px, tx2, x = 1, g , n 1. Cd, the demand for surviving children (an important consideration in low-income societies where infant mortality rates are high), 2. (Y), is a function of the given level of household income 3. Pc, the “net” price of children (the difference between anticipated costs, mostly the opportunity cost of a mother’s time, and benefits, potential child income and old-age support 3. Px, the prices of all other goods , 4. Tx, and the tastes for goods relative to children 22  6.4.3 THE MICROECONOMIC HOUSEHOLD THEORY OF FERTILITY 0Cd>0Y > 0 The higher the household income, the greater the demand for children. 0Cd>0Pc < 0 The higher the net price of children, the lower the quantity demanded. 0Cd>0Px > 0 The higher the prices of all other goods relative to children, the greater the quantity of children demanded. Cd>0tx < 0 The greater the strength of tastes for goods relative to children, 23 the fewer children demanded  6.4.4 THE DEMAND FOR CHILDREN IN DEVELOPING COUNTRIES The economic theory of fertility assumes that the household demand for children is 1. Son Preference. The preference for sons over determined by family preferences for a daughters is particularly prevalent in South Asia certain number of surviving (usually male) and East Asia children (i.e., in regions of high mortality, 2. Some Empirical Evidence Statistical studies parents may produce more children than they in a broad spectrum of developing countries have actually desire in the expectation that some provided support for the economic theory of will not survive), by the price or “opportunity fertility cost” of rearing these children, and by levels of family income. 24  6.4.5 IMPLICATIONS FOR DEVELOPMENT AND FERTILITY 4. A reduction in infant mortality through 1. An increase in the education of women and expanded public health programmes a consequent improvement in and better nutritional status for both mother and their role and status. child, and better medical 2. An increase in female nonagricultural care. wage employment opportunities, 5. The development of old-age and other social which raises the price or cost of their security systems outside the traditional child-rearing activities. extended family network to lessen the economic 3. A rise in family income levels through the dependence of parents, increased direct employment and especially women, on their offspring. earnings of a husband and wife or through 6. Expanded schooling opportunities so that the redistribution of income and parents can better substitute child assets from rich to poor. 25 “quality” for large numbers of children.  POPULATION GROWTH IS NOT A REAL PROBLEM Population growth is not the problem but the other issues. Population growth is a false issue deliberately created by dominant rich-country agencies and institutions to keep developing countries in their dependent condition. For many developing countries and regions, population growth is in fact desirable. SUPPORTING ARGUMENTS 1. UNDERDEVELOPMENT If correct strategies are pursued population will take care of itself. As long as people in developing countries remain impoverished, uneducated, and unhealthy, the large family will constitute the only real source of social 26 security.  2. WORLD RESOURCES AND ENVIRONMENTAL DEPLETION Population can only be an economic problem in relation to the availability and utilization of scarce natural and material resources. Developed nations should curtail their excessively high consumption standards instead of asking less-developed nations to restrict their population growth. 3. POPULATION DISTRIBUTION It is not the number of people that is causing population problems but their distribution in space. Governments should therefore strive not to moderate the rate of population growth but rather to bring about a more natural spatial distribution of the population in terms of 27 available land and other productive resources. 4. SUBORDINATION OF WOMEN Perhaps most important, women often bear the disproportionate burdens of poverty, poor education, and limited social mobility. In many cases, their inferior roles, low status, and restricted access to birth control are manifested in their high fertility. According to this argument, population growth is a natural outcome of women's lack of economic opportunity. If women's health, education, and economic well-being are improved along with their role and status in both the family and the community, this will inevitably lead to smaller families and lower population growth. 28  IT IS DELIBERATELY CONTRIVED FALSE ISSUE Rich nations are pressuring poor nations to adopt aggressive population control programmes, even though they themselves went through a period of sizeable population increase that accelerated their own development processes. They are doing this in order to maintain an international status quo that is favorable to the rich nations' self-interests and advantages without considering other states. Worldwide birth control campaigns are seen as manifestations of the fears of the developed world in the face of a possible radical challenge to the international order by the people who are its first victims. Larger populations provide the needed consumer demand to generate favourable economies of scale in production, to lower production costs, and to provide a sufficient and low-cost labour supply to achieve higher output levels. 29  THREE OTHER NONECONOMIC ARGUMENTS First, many countries claim a need for population growth to protect currently underpopulated border regions against the expansionist intentions of neighbouring nations. Second, there are many ethnic, racial, and religious groups in less-developed countries whose attitudes favouring large family size have to be protected for both moral and political reasons. Finally, military and political power are often seen as dependent on a large and youthful population. 30  COUNTER-ARGUMENTS OF POPULATION GROWTH AS A “DESIRABLE IDEOLOGY” EXTREMIST ARGUMENT THEORETICAL ARGUMENT EMPERICAL POINTS Population and global The population-poverty composed of economic crisis is regarded as the cycle theory yields negative growth, poverty and inequality, education, principal cause of economic consequences health, food, poverty. and should be a real environment, and It encouraged advocates concern for developing international migration to assert that "world" countries. which negatively bounce population stabilisation Family-planning back to status quo of or even decline is the programmes are needed to population growth and most urgent avoid unwanted lower economic contemporary task, pregnancies. progress. 31  OTHER EMPERICAL ARGUMENTS : SEVEN NEGATIVE CONSEQUENCES OF OVERPOPULATION ECONOMIC GROWTH POVERTY AND INEQUALITY EDUCATION Even in statistical Family size and low Rapid population growth lowers per capita correlations population incomes restrict the income growth, growth is often opportunities of inconclusive, at the parents to educate especially those that are household level the all their children already poor, dependent evidence is strong and on agriculture, and wherein, stock of compelling. Larger family experiencing pressures size both exacerbate human capital is on land and natural inequality and reduced by rapid resources. perpetuate poverty. population growth.  HEALTH FOOD ENVIRONMENT MIGRATION High fertility harms the Feeding the world's Rapid population Migration, health of mothers and population is made growth both legal children. It increases more difficult by contributes to and illegal, to the health risks of rapid population environmental be one of the pregnancy, and closely growth in large degradation in major spaced births have fraction of the form of forest consequences been shown to reduce developing-country encroachment, of developing birth weight and food requirements deforestation and countries` increase child mortality are the result of population other destructing rates. population increases. growth activities.  The following are the propositions constitute the essential components of the intermediate consensus opinion: The population growth is not a fundamental and primary cause of low levels of living, extreme inequalities, or the limited freedom of choice that characterize much of the developing world. The problem of population is not simply one of numbers but involves the quality of life and material well-being. Rapid population growth does serve to intensify problems of underdevelopment and to make prospects for development that much more remote.  6.6 Some Policy Approaches 1. General and specific policies that developing-country governments can initiate to influence and perhaps even control their population growth and distribution. 2. General and specific policies that developed-country governments can initiate in their own countries to lessen their disproportionate consumption of limited world resources and promote a more equitable distribution of the benefits of global economic progress. 3. General and specific policies that developed-country governments and international assistance agencies can initiate to help developing countries achieve their population objectives. 35 6.6.1 What Developing Countries Can Do 1. Eliminating Absolute Poverty: Reduces economic incentives for large families. 2. Reducing Income Inequality: Promotes equitable access to resources. 3. Expanding Educational Opportunities: Especially for women to empower decision-making. 4. Improving Job Opportunities: For both men and women. 5. Enhancing Health Services: Access to clean water, sanitation, and nutrition. 6.6.2 What the Developed Countries Can Do Population and Resource Use Disproportionate Resource Consumption: The U.S. (4.5% of global population) accounts for nearly 20% of world energy use. Focus on affluent nations' consumption patterns rather than just population size in developing countries. 37  Environmental Impact Nonrenewable Resource Depletion: Rising affluence leads to increased depletion of resources like petroleum and basic metals. Fossil fuel consumption in developed countries contributes significantly to carbon dioxide emissions and global warming. 38  Global Inequality in Resource Distribution Inequitable Resource Use: Wealthy nations waste resources, while developing countries struggle to access essential materials. Need for affluent countries to reduce consumption to free up resources for poorer nations. 39  The Role of Lifestyle Changes Simplifying Consumption Habits: Developed nations should adopt sustainable lifestyles to alleviate resource pressures. This would allow resources to be redirected towards social and economic development in poorer countries. 40  Immigration as a Solution Liberalizing Immigration Policies: Historical context: Migration helped alleviate population pressure in Europe. Current barriers prevent economic benefits from international migration. Legal migration could provide significant economic advantages to developing countries, estimated at $250 billion annually. 41 6.6.3 How Developed Countries Can Help Developing Countries with Their Population Programmes Genuine Support for Development Financial Assistance: Expand public and private funding for development efforts, especially in sub-Saharan Africa. Trade Relations: Establish tariff- and quota-free access to developed markets. Technology Transfers: Provide appropriate technologies and assist in building indigenous scientific research capabilities. Commodity Pricing: Implement fair international pricing policies for commodities. Resource Sharing: Promote equitable sharing of scarce natural resources. 42  Areas for Direct Fertility Moderation Assistance Research in Fertility Control Technologies: Support for developing effective contraceptive methods, such as pills, IUDs, and barrier contraception. Encourage research aimed at improving low-cost contraceptive options while minimizing health risks. Financial Assistance for Family Planning Programs: Provide funding for family-planning initiatives, public education, and national population policy research in developing countries. Focus on integrating these programs with efforts to improve living standards for low-income populations. 43  Critical Considerations Resource Allocation: Evaluate whether funding for family planning might be more effective if redirected toward improving living conditions. Motivation for Family Size Reduction: Emphasize the need for programs that address socio-economic factors influencing family size decisions. 44  6.6.4 Policy for Still-Developing Countries Facing Population Declines Encourage Immigration: Attract skilled workers through paths to citizenship or guest worker systems. Address political resistance to immigration related to economic insecurity. Retraining Programs: Provide generous retraining for older workers to adapt to evolving job markets. Focus on developing advanced skills for modern economies. Move Up the Value Chain: Shift production processes to include more advanced, high-value activities domestically. Increase productivity to support a larger nonworking population. 45