necessary for understanding the relationship between the population and national development. 4 ▫Whereas the Malthusian school of thought believes that. the relationship between population growth and economic development. conclusions of this school of thought as expressed in an overview of the population-. Relationship: A complex interrelated system, many variables Theories of Population and Development interrelations. Malthusian Social expenditure on school and health due to young age Population growth and economic development.
The peak of infection occurs among young adults. They have children, of whom some become infected and die, but most live on as AIDS orphans and are exposed to the same risks when they reach young adulthood. At the end of the 18th century, Thomas Malthus and his followers argued that high fertility and poverty went hand in hand.
Population and Poverty: New Views on an Old Controversy
Malthus himself, focusing on the impoverishing effects of scarce land and rising food prices, urged couples not to marry and have children unless they could afford to support them. They argued that because high birthrates create large numbers of children relative to the number of working adults, savings that might otherwise be invested in the country's infrastructure and development instead must be diverted to meeting the immediate food, health care, housing and education needs of growing numbers of children and adolescents.
This prevents countries and families from making the longer-term investments needed to help lift them out of poverty. Using this argument, neo-Malthusians played a key role during the s and s in efforts to mobilize the world's wealthy developed countries to provide financial aid to support government-administered family planning programs in developing countries. Through such international assistance policies, governments and nongovernmental organizations in developing countries with rapid rates of population growth received support that enabled them to develop or expand access to family planning services.
Economists were quick to point out that even if high fertility and high proportions of the population living in poverty were correlated, this correlation would not imply causality. In fact, the relationship could run in the opposite direction: Poverty could be the cause of high fertility. Poor people often want more children because children represent wealth, provide household labor and are the only form of social security available to parents in their old age.
Furthermore, economists questioned whether reduced rates of population growth actually have positive effects on savings and investment.
They pointed out that even though the population in developing regions doubled between andthis had not prevented many countries in those regions from raising overall living standards.
Byfew economists believed that the population factor mattered.
In the view of such skeptics, decisions about family size and reproduction are a private issue, and contraceptive practice is a "private good" whose supply is better left to market forces than to government bureaucrats. Unempowered women are often unable to act on their own behalf to obtain contraceptive services to regulate their childbearing; they are also the group most likely to believe that bearing many children will provide a bulwark against poverty in their old age.
This points to the urgent need to improve women's education and job prospects if they are to assume greater control over their lives and move out of poverty.
Programs that combine social and economic development and family planning services for poor women encourage them to have fewer children and thereby enhance their prospects of achieving a different, less-dependent kind of life. Such programs also provide women with the tools they need to attain those two goals.
Recent research has looked at the linkages between population growth and economic growth at different stages of the transition from high to lower fertility.
When fertility is high, the proportion of the population made up of children and teenagers is large relative to the share made up of working adults. This is called the age-dependency effect. As fertility rates drop, the ratio of potential workers people aged to nonworkers people 14 or younger and people aged 65 and older rises, meaning that more workers are responsible for fewer children.
The reduction in the ratio of youthful dependents to working-age adults should enable countries to increase their stocks of physical and human capital schools and well-trained teachers, health care facilities and well-trained health workers, and modern communications networks and well-trained workers to staff them. However, opening a demographic window of opportunity does not guarantee a surge in economic growth.
For one thing, it is temporary, because low fertility will eventually increase the proportion of another dependent group—the population made up of older people who are no longer working. The intensity of the age-structure effect depends on the speed with which the transition to low fertility takes place. It also depends on countries' pursuing sound economic and social policies, to enable the large wave of potential workers to acquire skills and find productive employment.
When this happens, as it did in countries like South Korea and Taiwan, a temporary surge in the accumulation of physical and human capital contributes to a rapid rise in living standards.
Research on the effects of rapid fertility decline in Latin America raises some cautionary signs. Economic growth has been slower in Latin America than it was in East Asia in the s, in part because of the failure of countries in this region to invest as much in education, especially for the poor. Moreover, economic policies in these countries were less conducive to the creation of productive employment for the working-age population.
Similar policy failures in South Asia raise the prospect that India and Bangladesh, which are now moving into the later stages of their transitions to low fertility, may not benefit at all from the favorable demographic conditions created by those transitions. The demographic window of opportunity is a one-time and relatively brief phenomenon around two decades, depending on the speed of the transition9 and it would be a sad irony if the successful efforts of countries to achieve lower population growth failed to reduce poverty because their accompanying economic policies were misguided or were instituted too late.
High Fertility, Rapid Growth and Poverty Although the concerns of early neo-Malthusians that high fertility actually inhibits the efforts of poor countries to reduce poverty were discounted by many economists, 10 recent studies have supported their argument. Comparisons of poor countries that experienced rapid fertility decline with those that did not find that high fertility increases absolute levels of poverty both by retarding economic growth which reduces the possibility of growth-induced poverty reduction and by worsening the distribution of additional income created by economic growth.
This may be one reason why simple cross-national comparisons of links between fertility and poverty levels fail to reveal much of a correlation. Economists point out that global food production has exceeded population growth for several decades, and that food scarcity and malnutrition depend more on agricultural and trade policies and on poor people's ability to buy food than on rates of population growth. Interestingly, a recent report on the global food outlook agrees with both of these points, but also notes that malnutrition in poor countries would be substantially lower if population growth in those countries were closer to the low variant than to the medium variant of United Nations population projections.
Family Size and Household-Level Poverty Recognizing that demographics have a dual impact on poverty both on overall growth and on improvements in living standards for the poorest families raises the question of whether high fertility is an obstacle to poverty reduction within households.
For example, children in large families perform less well in school and less well on intelligence tests than do children from small families. When economic class is controlled for, the correlation is approximately halved, but remains significantly negative. This was a return to mainstream neo-classical economics, which had always viewed Malthus's views as one-dimensional and simplistic, and which generally expressed skepticism about the strength of the relationship between high fertility and economic growth.
In an important sense, the NRC report broke the back of the population movement and ushered in a period of uncertainty about the priority that should be given to population policies, as well as about what the content of policy should be. An important conclusion to be drawn from the history recounted thus far is that the views of economists matter a great deal. Indeed, notwithstanding Robert McNamara's deep commitment to population stabilization and his personal efforts to promote population policies during his presidency of the World Bank, the Bank's cadre of professional economists has for years succeeded in keeping population at a relatively low priority in terms of bank lending operations.
More often than not, the macroeconomic and sector analytic work of the Bank pays scant attention to population dynamics, even in such chronically high fertility regions as Sub-Saharan Africa. This brings us to the third, and current, stage of economic thinking on population and economic development.
They reasoned that rapidly declining fertility is accompanied by changes in the ratio between the economically active population and dependent population.
(PDF) The Influence of Population Growth
As fertility falls, a larger proportion of the population is in the age range 15—65, compared with the under 15 and over 65 categories. Thus, assuming countries also pursue sensible pro-growth economic policies, the demographic bonus ought to translate into a jump in income per capita. Applying the model to the Asian Tigers Korea, Singapore, Taiwan and Thailandthese economists found that the data fit the model extremely well.
Countries that incorporated strong and effective population policies within the broader context of social and economic development policies were able to cash in very profitably on the demographic bonus. This latest chapter in the ongoing saga of macroeconomic thinking on population—economic interactions does not by any means represent a new consensus.
But as the research accumulates, more and more policymakers are paying attention to it and forming their own ideas in accordance with the findings. What do we know—micro? One might expect that economists interested in examining the impact of fertility on household income would pay more attention to the micro-level than to the macro-level, but this is not the case.
Much more research has been conducted at the macro-level than at the micro-level, probably because of the greater availability of appropriate datasets. The truth is, that only detailed household panel surveys or randomized interventions or actual or natural experiments are adequate to accurately estimate the impact of fertility at one point in time on household income at subsequent points.
Such datasets are comparatively rare because of the time and expense required to construct them. Fortunately, in just the last few years, datasets have become available or have been discovered by economists that permit sophisticated micro studies of the fertility—poverty relationship Merrick One of these is the Indonesian Family Life Survey, a panel study that covered several years and that permitted investigators to look at the effect of changes in desired and actual fertility at one point in time on subsequent household poverty.
This decline in women's contribution to household income, in turn, reduced expenditure per capita in the household, pushing a significant number of families into poverty and preventing the escape of a significant number from poverty. One of the economists who has been most demanding of a solid evidence base for conclusions about the effect of fertility on economic development or poverty is T.
Schultz, while willing to stipulate the plausibility that high fertility acts as a barrier to economic growth and poverty reduction, has nonetheless for many years remained skeptical that the relationship is as strong or as stable as many neo-Malthusians assert it to be. Within two decades many of these indicators of the welfare of women and their children improve significantly in conjunction with the programme induced decline in fertility and child mortality. The question of whether or not high fertility leads to, or exacerbates, poverty and whether this in itself should be grounds for policy interventions ultimately revolves around the question of parental intentions with respect to childbearing.
If parents perceive children as good in and of themselves and are willing to forego other forms of consumption for the sake of having a large number of children, most economists would argue it is hard to make the case that they should be urged to have fewer of them.
If, on the other hand, many of the children very poor parents are bearing are the result of unintended pregnancies, the case for public policies to assist them in having fewer would seem to be stronger. Thanks to the remarkable series of surveys that began with the World Fertility Survey in the s and continues to this day as the Demographic and Health Surveys programme, we know a great deal about fertility intentions in a large number of countries around the world, and the inescapable conclusion is that a significant proportion of births in developing countries are the result of unintended pregnancies.
The rate of population growth and the size of annual growth increments matter. Even in the case of countries that can adjust to their present rates of population growth, economists recognize that it takes time and effort for government and other institutions to expand urban infrastructure, provide new and better health and educational services, successfully integrate technology, enforce environmental regulations and expand trade.
Developing countries in which population growth eases through declines in birthrates will be more likely to increase per capita economic growth rates and will have more time to generate needed jobs.
Population Growth and Institutions The debate over the economic impacts of contemporary human population growth is not just about people, but about modern institutions and their capacities to deal with rapid social and ecological change. Institutions mediate relationships between people. They convey signals, channeling human activity by facilitating or rewarding some behaviors while obstructing or punishing others.
In economic terms, institutions manipulate transaction costs—the costs of defining, establishing and maintaining property rights. Reducing transaction costs increases the ratio of benefits to costs, making it more likely that the desired transactions occur. Raising transaction costs makes these transactions less likely. The most fundamental institutions—markets, law, property rights—evolved with human culture. Others were forged more deliberately as products of state policies and reforms.
The Influence of Population Growth
These include codes and norms for savings and finance systems, systems of formal education, transportation and communications networks, public health systems, and international trade.
When modern macro-level institutions function well, they can impart flexibility to an economy and transmit widespread benefits.
How each nation fares as it undergoes the changes and stresses brought about by population growth depends, at least in part, upon the nature of its institutions. The study of institutions has a long history in economics. Classical economists of 18th and 19th century Europe provided extensive commentary and critique on the institutions of their day, including those involved in governance, trade, labor practices wage labor, servitude and slaverytenancy, colonialism and theocratic power.
However, interest in the broad spectrum of institutions waned toward the end of the 19th century with the emergence of early neoclassical economic theory, a mathematical treatment of relationships principally related to a single institution, the market. Over the past two decades, however, interest in institutions has re-emerged.
Now, more than ever, social scientists credit modern institutions with a fundamental role in the formation and stability of nation states. Many economists see institutions, when linked to technology and human creativity, as the principal engines of economic growth during this past century 23 source of economic resilience.
By this view, institutions permit economies to adapt to social and environmental change, such as those to which population growth contributes. Beginning around the late s, neo-Malthusians—analysts and commentators who share the notion expressed by 18th century economist Thomas Robert Malthus that population growth inevitably collides with limiting resources—projected a pessimistic view of the coming impacts of population growth.
The opposite view, that institutions can faultlessly handle these changes if allowed to operate without restriction, is shared by two groups of scholars, neoliberals and distributionists, whose opinions are otherwise separated by the width of the political spectrum.
Neoliberals—Julian Simon is among the most prominent—argue that population growth is not a problem and that discussion of it only distracts attention from real problems. A narrow set of evolved institutions—the market, private property rights and supportive laws—coupled with technological progress and creativity, provide all the necessary tools for adjusting. Distributionists, too, argue that concerns about population growth distract from the critical issues.
Distributionists maintain that state institutions promoting poverty alleviation and equity are the key to successful adjustment.
Both schools assert that the positive economic outcomes resulting from their own brand of institutional mediation reduce the demand for children.
In the midst of this debate the revisionists emerged during the s. Revisionists conclude that to adjust adequately to population growth, populous countries must have a broad array of functional modern institutions. Regardless of national income, population growth can degrade renewable natural assets where property rights are inadequate or nonexistent.
For revisionists, the institutional thesis just described explains much of what economists have been observing over the past four decades of rapid population growth in the developing world. In the following sections we argue that revisionism itself can be revised, or at least fine tuned. Social scientists, however, have long been engaged in research to discern how institutions work and for whom they work best. Their conclusions have implications for the ways in which key aspects of population growth—family size, increments of young people, human density and contributions to aggregate demand for goods and services— affect the way in which societies manage productive assets and allocate the goods and services derived from them.
Economists consider it a revisionist document, 29 a break from the traditional arguments that previously structured the population debate. To the surprise of many, the committee of authors declined to declare alarm over the roughly 82 million people being added 30 the developing world annually. Neither, however, did the committee argue that rapid population growth was irrelevant to poverty or economic development. Instead, the National Research Council review on population growth presented decidedly middle of the road conclusions.
Population, poverty and economic development
The review supported the idea that rapid population growth could have negative economic consequences. Slowing population growth, it stated, would likely ease rates of degradation of certain renewable natural resources, such as air, water, forests and many species of plants and animals. Lowering fertility would also help families spare the time and money for more adequate health care, nutrition and education for their children, while making it easier for governments to increase spending for each child in both health and education.
And fertility decline in developing countries could, through various wage- related effects, help reduce income disparities between social classes. In particular, economists had not uncovered a significant statistical relationship—not even simple correlations—between growth in population and growth in gross domestic product.
Nor did national statistics demonstrate a consistent relationship between declines in fertility and household or government savings. Nor were developing country governments falling hopelessly behind in providing education and health, despite the clear pressures of population growth. National statistics demonstrated what was already obvious to most economists: