Population Growth and Economic

Development: Causes,
Consequences, and
Controversies

The Basic Issue: Population

Growth and
the Quality of Life

Population
As the 21st century begun, the worlds population
was estimated to be almost 6.1 billion. Projection by
UN places the figure at more than 9.1 billion by
2050 before reaching a maximum of 11 lb by 2200

Over 90% of world population will inhibit the

developing world (Africa will experience the largest
percentage, followed by Latin America and Asia)

The relation between population growth (PG) and

economic development is a complex one. And the
historical quantitative evidence is ambiguous,
particularly what is cause and what is effect

Population
Does economic growth/ development
precede PG or PG is a necessary condition for
economic development to take place?

Many people would consider that rapid PG

in the third world to be a major obstacle to
development

Yet there are many ways in which PG may

be a stimulus to progress

There may be rational reasons why families in

developing countries choose to have many children

Religious taboos and norms

High rates of infant mortality
Status of women in society
Security in old age
Desire for a son by men
Womens earning outside work
Age of marriage
Status /symbol/ prestige
Child labour

Questions for debate

1. Will developing countries be capable of improving the
levels of living for their people with the current and
anticipated levels of population growth? To what
extent does rapid population increase make it more
difficult to provide essential social services, including
housing, transport, sanitation, and security?
2. How will the developing countries be able to cope with
the vast increases in their labor forces over the
coming decades? Will employment opportunities be
plentiful, or will unemployment levels soar?

Questions for debate

3. Will developing countries be able to extend
the coverage and improve the quality of their
health and educational systems so that
everyone can have access to adequate health
care and a basic education?
4. Is there a relationship between poverty and
family size?

Fertility and Mortality

Trend
Birth rate is birth per 1000 of population

Death rate is death per 1000 of population

The rate of natural increase is the difference

between the birth rate and death rate, but it
is conventionally measured in terms of %

The growth potential of a population can be

expressed through its doubling time

Fertility and Mortality

Trend rising at a constant rate ,
For population
doubling time is approximately 70 divided by
the growth rate
Thus growth rate at 1% a year doubles the
population in about 70 years, , while steady
2% annual growth doubles it in just 35 years
and 3% growth in 23 years and few months

Birth rates in LDCs are generally much

higher than the Dc and LDC death rate is
also higher. However the death rate
differences are substantially smaller than the
differences in the birth rates

As a result the average rate of PG is now

about 1.4% in LDCs and 0.1% in DCs

10

Age Structure and Dependency

Burden
World population today is very youthful in
the LDCs

Children under 15 constitute almost 40% of

total population (in DCs it is 20%)

So dependency burden is very high in LDCs

11

The hidden momentum of

PG
PG has its tendency to a powerful momentum
even after birth rates have declined substantially
Two basic reasons for this

# High birth rates can not be altered over night

(social, economic, political and institutional forces)
# The second and most obvious reason for the
hidden momentum of population growth relates to
the age structure of the LDC population

12

The hidden momentum of

PG
A large proportion of population is children
in LDCs

In such a high fertility population, young

people greatly out numbered their parents

When their generation reaches adulthood,

the number of potential parents will
inevitably much larger than at present

13

The hidden momentum of

PG
It follows even if these new parents have
only enough children to replace themselves
(two per couple, whereas their parents have
had four), the fact that the total number of
parents having two children is much greater
than the no. of couples who previously had
four children

That means total population will still

increase substantially before leveling off

14

The Theory of Demographic

Transition (DT)

15

Demographic Transition for

Developed Countries
The process by which fertility rates eventually
decline to replacement levels has been portrayed by
the famous concept in economic term which is
called the DT

The DT attempts to explain why all contemporary

developed countries have more or less pass through
the same three stages of modern population history

The following figure roughly depicts the historical

stages of DT in western Europe

16

Actual birth and death rates per 1,000 inhabitants

40

30
Birthrate
20

Death rate

10
Stage I
0

1800

Stage II

1840 1850

Stage III

1890 1910

2000

Future

Year
The Demographic Transition in Western Europe

17

Before their
economic
modernization
these countries
for centuries
had stable or
very slow
growing
population as
combination of
high birth rate
and high death
rate. This is
stage 1

18

In the figure
before early
19th century,
birth rates
hovered
around 35 per
1000 while
death rate
fluctuated
around 30 per
1000. This
resulted in PG
rate of around
5 per 1000 or
less than 0.5%

19

Stage 2,
The beginning of
WE s DT, was
initiated around the
first quarter of 19th
century. When
modernization,
associated with
better public health,
healthier diets,
higher incomes and
other improvements
in life led to marked
reduction in the
death rate or in
mortality that
gradually raised the
life expectancy from
40 to over 60 years

20

However the
decline in
death rate was
not
immediately
accompanied
by a decline in
fertility. As a
result the
growing
divergence
between high
birth rates and
falling death
rates leads to
a sharp
increase in PG
compared to

21

So this stage 2
thus marks the
beginning of the
DT

Finally stage 3
was entered when
the forces and
influences of
modernization and
development
caused the
beginning of a
decline in fertility,
falling birth rates
converged with
lower death rates,
leaving little or no
population growth

22

This stage 3 did not really begin until late in

19th century. But since the initial level of birth
rate was generally low in WE as a result of
either late marriage or celibacy, over all
rates of PG seldom exceeded the 1%, even at
this peak

23

By the end of WEs

DT in the second
halve of the 20th
century, the
relationship
between birth and
death rates that
marked the early
1800s totally had
reversed, with
birthrate
fluctuating and
death rates
remaining fairly
stable or slightly
rising. This later
phenomenon is
simply due to the
older distribution
of contemporary
Elderly population.
24

Demographic Transition for

Developing Countries

The following figure shows the population

histories of contemporary developing countries
which contrast with those of WE and fall into two
patterns

Birthrates in many underdeveloped countries

today are considerably higher than they were in
pre-industrial Europe

This is because women tend to many at early an

earlier age. As a result, there are both more
families for a given population size and more
years in which to have children
25

Actual birth and death rates per 1,000

inhabitants

50
Case B
40

Birthrate

30

Case A

20
Case B
10

Case A
Stage I

1900

Stage II
1950

Death rate

Stage III
1965-70

Future

Year
The Demographic Transition in Developing Countries

26

Beginning the 1940s

and especially in the
1950s & 1960s,
stage 2 of the DT
occurred throughout
the most developing
world
The application of
highly effective
imported modern
medical and public
health technologies
caused LDC death
rates to fall much
more rapidly than in
19th century in
Europe

50

Actual birth and death rates per 1,000

inhabitants

Case B

40

Birthrat
e

30

Case A

20
Case B

10
0

Case A
Stage I
1900

Stage II
1950

Death rate

Stage III

1965-70

Year
The Demographic Transition in Developing
Countries

Futur
e

27

Given their
historically
high BR (over
40 per 1000 in
many
countries) this
has meant
that stage 2 of
the LDC DT
has been
characterized
by PG rates
well in excess
of 2% per

50

Actual birth and death rates per 1,000

inhabitants

Case B

40

Birthrat
e

30

Case A

20
Case B

10
0

Case A
Stage I
1900

Stage II
1950

Death rate

Stage III

1965-70

Year
The Demographic Transition in Developing
Countries

Futur
e

28

With regard to stage 2,

we can distinguish
between two broad
classes of developing
countries
Case A:
Modern methods of
death control
combined with rapid
and widely distributed
rises in levels of living
have resulted in death
rate falling as low as
10 per 1000 and BR
also falling rapidly, to
levels between 20 and
30 per 1000

50

Actual birth and death rates per 1,000

inhabitants

Case B

40

Birthrat
e

30

Case A

20
Case B

10
0

Case A
Stage I
1900

Stage II
1950

Death rate

Stage III

1965-70

Year
The Demographic Transition in Developing
Countries

Futur
e

29

This countries
most notably
South Korea,
Taiwan, China,
Cuba, Srilanka
have thus
entered stage
3 of their DT
and have
experience
rapidly falling
rates of
overall PG

50

Actual birth and death rates per 1,000

inhabitants

Case B

40

Birthrat
e

30

Case A

20
Case B

10
0

Case A
Stage I
1900

Stage II
1950

Death rate

Stage III

1965-70

Year
The Demographic Transition in Developing
Countries

Futur
e

30

Case B:
But some
developing
countries fall into
case B
After an initial
period of decline,
DR have failed to
drop further,
largely because of
the persistence of
widespread
absolute poverty
and low levels of
living and more
recently because of
AIDS epidemic

50

Actual birth and death rates per 1,000

inhabitants

Case B

40

Birthrat
e

30

Case A

20
Case B

10
0

Case A
Stage I
1900

Stage II
1950

Death rate

Stage III

1965-70

Year
The Demographic Transition in Developing
Countries

Futur
e

31

Moreover
continuance of high
BR due to as a result
of these low levels of
living causes overall
PG to remain
relatively high
These countries,
including many of
those in SSA and
Middle East are still
at stage 2 of their
DT. Though fertility is
declining it remains
very high in these
part of the world

50

Actual birth and death rates per 1,000

inhabitants

Case B

40

Birthrat
e

30

Case A

20
Case B

10
0

Case A
Stage I
1900

Stage II
1950

Death rate

Stage III

1965-70

Year
The Demographic Transition in Developing
Countries

Futur
e

32

The important question is then when and what

condition these countries will experience falling BR
and a slower expansion of PG

To answer this question we have to ask prior

question

What are the principle cause of high fertility in LDC

and can these of the determinants of the demand
for children be influenced by government policy?
33

In the last decade, fertility rates in many of the poorest

countries , such as Bangladesh and most of the countries
in SSA, have experienced an impressive decline

This decline is the result of more widespread availability

of family planning

Although this change helps to set the stage for an

opportunity for successful development in coming years,
but developed countries need to do their part in
providing expanded development assistance, especially
efforts focused on the need and opportunity to greatly
reduce the incidence of poverty, which remains the
biggest cause of high rates of fertility
34

The Malthusian
Population Trap

35

The basic idea

More than two centuries ago, the Reverend

Thomas Malthus put forward a theory of the
relationship between population growth and
economic development that is influential today
Writing in his 1798 Essay on the Principle of
Population and drawing on the concept of
diminishing returns, Malthus postulated a
universal tendency for the population of a
country, unless checked by dwindling food
supplies, to grow at a geometric rate, doubling
every 30 to 40 years
36

At the same time, because of diminishing returns to the fixed

factor, land, food supplies could expand only at a roughly
arithmetic rate

In fact, as each member of the population would have less land

to work, his or her marginal contribution to food production
would actually start to decline

Because the growth in food supplies could not keep pace with
the burgeoning population, per capita incomes (defined in an
agrarian society simply as per capita food production) would
have a tendency to fall so low as to lead to a stable population
existing barely at or slightly above the subsistence level

37

Malthus therefore contended that the only way

to avoid this condition of chronic low levels of
living or absolute poverty was for people to
engage in moral restraint and limit the
number of their progeny

Malthus is popularly known as the father of

the modern birth control movement

38

Modern economists have given a name

to the Malthusian idea of a population
inexorably forced to live at subsistence
levels of income
They have called it the low-level
equilibrium population trap or, more
simply, the Malthusian population trap

39

Assumptions

No possibility of technological progress

Land and other natural resources are fixed in
quantity
Presence of diminishing return to scale
Birth rates and death rates are equal at initial
stage
Population grows only when income (or food
production) grows
The idea is associated with demographic
transition
40

Explanation with diagram

low-level equilibrium population trap or,

more simply, the Malthusian population
trap

The basic Malthusian model can be illustrated

by comparing the shape and position of curves
representing population growth rates and
aggregate income growth rates when these
two curves are each plotted against levels of
per capita income
41

42

On the vertical axis, plot

numerical percentage
changes, both positive and
negative, in the two principal
variables under consideration
(total population and
aggregate income)
On the horizontal axis levels
of per capita income are
measured.

43

The x-axis shows the level

of income per capita. The
y-axis shows two ratesof
population growth and of
total income growth. Per
capita income growth is,
by definition, the
difference between
income growth and
population growthhence
the vertical difference
between these two curves

44

The dashed curve portrays the

assumed relationship between
rates of population growth
P/P (measured vertically) and
levels of per capita income, Y/P
(measured horizontally)
At a very low level of per
capita income, Y0, the rate of
population change will be nil,
and a stable population will
exist
Thus Y0 might represent
concept of absolute poverty
Birth and death rates are equal
and the population is barely
holding its own absolute level
The situation is analogous to
stage 1 of the DT theory

45

At per capita income levels beyond

(to the right of) Y0, it is assumed
that population size will begin to
increase under the pressure of
falling death rates
Higher income means less
starvation and disease
Falling death rates provide the
impetus for an expanding
population (similar to DT stage 2)
Population growth achieves its
maximum rate, roughly 3.3%, at a
per capita income level Y2
In accordance with stage 3 of DT
theory, birthrates will begin to
decline and the population growth
rate curve becomes negatively
sloped and once again approaches
the horizontal axis

46

Next is the relationship between the growth

of aggregate income and level of per capita
income
If aggregate income (measured by total
production) is rising faster, per capita
income by definition must be increasing; if
total population is growing faster than total
income, per capita income must be falling
In this figure, the rate of aggregate income
growth is assumed at first to be positively
related with per capita income; that is, the
higher level of per capita income, the
higher rate of increase in aggregate income
The economic reason for this positive
relationship is the assumption that saving
vary positively with income per capita

47

Beyond a certain per capita

income point (Y3), however,
the income growth rate curve
is assumed to level off and
then begin to decline as new
investments and more people
are required to work with
fixed quantities of land and
natural resources

This is the point of

diminishing returns in the
Malthusian model

48

Three points (A, B and C) are

plotted from the intersection
of the two curves
Point A represents the point at
which the Malthusian
population trap level of per
capita income (Y1) is attained
It is a stable equilibrium point
Any small movement to the
left or right point of A will
cause the per capita income
equilibrium point to return to
Y1

49

For example, as per capita

income rises from Y1 toward Y2,
the rate of population increase
will exceed the rate of aggregate
income growth (the P/P curve is
vertically higher than Y/Y curve)
The arrow pointing in the
direction of A from the right
shows that per capita income
must fall back to its very low level
at Y1 for all the point between Y1
and Y2
B is an unstable point in the
sense that any movement to the
left or right will continue until A or
C is achieved
50

According to modern-day neo-Malthusians, poor nations

will never be able to rise much above their subsistence
levels of per capita income unless they initiate
preventive checks (birth control) on their population
growth
In the absence of such preventive checks, Malthusian
positive checks (starvation, disease, wars) on
population growth will inevitably provide the restraining
force

51

Criticisms of the Malthusian

Model

The Malthusian population trap provides a

theory of the relationship between population
growth and economic development.
Unfortunately, it is based on a number of
simplistic assumptions and hypotheses that do
not stand the test of empirical verification. We
can criticize the population trap on two major
grounds

52

First, the model ignores the enormous impact of technological

progress in offsetting the growth-inhibiting forces of rapid
population increases
The history of modern economic growth has been closely
associated with rapid technological progress in the form of a
continuous series of scientific, technological, and social inventions
and innovations. Increasing rather than decreasing returns to
scale have been a distinguishing feature of the modern growth
epoch
While Malthus was basically correct in assuming a limited supply
of land, he did notand in fairness could not at that time
anticipate the manner in which technological progress could
augment the availability of land by raising its quality (its
productivity) even though its quantity might remain roughly the
same
53

In terms of the population

trap, rapid and continuing
technological progress can
be represented by an
upward shift of the income
growth (total product) curve
so that at all levels of per
capita income it is vertically
higher than the population
growth curve. This is shown
in the figure
As a result, per capita
income will continue to grow
over time. All countries
therefore have the potential
of escaping the Malthusian
population trap
54

The second criticism of the trap focuses on its assumption that

national rates of population increase are directly related to the
level of national per capita income.
But research in LDCs indicate that there is no co-relation
between population growth and level of per capita income.

55

In sum, Malthusian and neo-Malthusian theories as applied to

contemporary

developing nations have severely limited relevance for the following

reasons:
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 centers on
the microeconomics of family size decision making in which individual,
and not aggregate, levels of living become the principal determinant
of a familys decision to have more or fewer children

56

Reference

Todaro. M. P and Smith. S. C, (2008),

Economic Development, Pearson
Education, Delhi, India.

57