⚡ Impact Of Population Growth On Economic Development

Thursday, September 09, 2021 12:48:43 PM

Impact Of Population Growth On Economic Development



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Impacts of Population Growth (on Developing Countries)

The theory was simple: given that there is a fixed quantity of land, population growth will eventually reduce the amount of resources that each individual can consume, ultimately resulting in disease, starvation, and war. Nevertheless, his essential insight that population growth constitutes a potential threat to economic development remained influential and informed international development policy agendas, especially in the s and s—a period marked by unprecedentedly rapid rates of population growth in many developing countries. At that time, the general view of economists was that high birth rates and rapid population growth in poor countries would divert scarce capital away from savings and investment, thereby placing a drag on economic development.

They hypothesized that larger families have fewer aggregate resources and fewer resources per child. Larger families therefore spread their resources more thinly to support more children. This leaves less for saving and investing in growth-enhancing activities. It also reduces spending on enhancing the economic potential of each child e. In the aggregate, these household level consequences of high birth rates were believed to exert a significant negative effect on per capita income growth [i] , [ii] , [iii]. This view underpinned the major rise in international funding for family planning in the s and s, with the aim of reducing birth rates and hence rates of population growth. In the s numerous empirical studies, utilising the growing volume of comparable international data, failed to detect a robust relationship between national population growth rates and per capita income growth [iv] , [v].

Indeed, he maintained long run effects were positive [vi]. This view arguably contributed to a major fall in international funding for family planning programs, beginning in the s [viii]. In the s researchers made two discoveries that questioned the neutrality of population growth with respect to economic development. First, analyses of the remarkable economic trajectory of East Asian countries in the late 20 th century suggested a sizeable fraction of their impressive economic growth was attributable to high levels of savings and investment facilitated by earlier fertility declines [ix] , [x].

Second, new research suggested that there was in fact a negative association between population growth and economic performance. When fertility rates decline over a sustained period of time the proportion of the working age population i. This finding prompted a subsequent reconsideration of the potential importance of reducing fertility in pursuit of growth. The second key discovery in the s was the emergence of a negative correlation between population growth and economic growth in further analyses of international cross-sectional data [xi] , [xii].

A recent meta-analysis of this research concluded that a negative relationship emerged in the post data, and that its strength has increased with time [xiv]. Moreover, as Figure 1 illustrates, the simple cross-sectional relationship between population growth and economic growth is clearly negative when viewed over the long run i. What explains the discrepancy between the early research, which found little evidence of a relationship between population growth and economic growth in cross-sectional data, and more recent work which finds a negative and significant one? We will tackle this question in our next post, which examines the unique economic history of the 20 th century, and how this might help explain why economists seem to keep changing their mind—and why demography is more important than ever in a post global economy.

A rapidly growing population increases the requirements of demographic investment which at the same time reduces the capacity of the people to save. This creates a serious imbalance between investment requirements and the availability of investible funds. Therefore, the volume of such investment is determined by the rate of population growth in an economy. Some economists have estimated that for maintaining the present level of per capita income, 2 per cent to 5 per cent of national income must be invested if population grows at 1 per cent per annum. In these countries, population is increasing at the rate of about 2. These factors are mainly responsible for stagnation in such economies.

The large size of population also reduces per capita availability of capital in less developed countries. This is true in respect of underdeveloped countries where capital is scarce and its supply is inelastic. A rapidly growing population leads to a progressive decline in the availability of capital per worker. This further leads to lower productivity and diminishing returns. Rapid growth of population directly effects per capita income in an economy. In a sense, so long as the rate of population growth is lower than the per capita income, rate of economic growth will rise but if population growth exceeds the rate of economic growth, usually found in the case of less developed countries, per capita income must fall.

A fast growth in population means a large number of persons coming to the labour market for whom it may not be possible to provide employment. In fact, in underdeveloped countries, the number of job seekers is expanding so fast that despite all efforts towards planned development, it has not been possible to provide employment to all. Unemployment, underemployment and disguised employment are common features in these countries. The rapidly rising population makes it almost impossible for economically backward countries to solve their problem of unemployment.

Increased population means more mouths to feed which, in turn, creates pressure upon available stock of food. This is the reason, the under-developed countries with rapid growing population are generally faced with a problem of food shortage. Despite all their efforts for raising agricultural production, they are not able to feed their growing population. Food scarcity effects economic development in two respects. Firstly, inadequate supply of food leads to undernourishment of the people which lowers their productivity. It further reduces the production capacity of the workers, Secondly, the deficiency of food compels to import food grains which places as unnecessarily strain on their foreign exchange resources. In less developed countries the majority of population lives in, where agriculture is their mainstay.

The growth of population is relatively very high in rural areas and it has disturbed the land man ratio. Also, cutting of forest leads to unanticipated climate changes , which impact the human life and settlements. The population growth enhances the limited natural resources use such as coal and petroleum, which degrades the environment in the form of air, soil, and water pollution. Low per capita income For a balanced per capita income, the economic and population growth must go hand in hand. In countries, where population growth rate exceeds economic growth, the per capita income lowers. This, in turn, minimizes the savings and lowers the living standard among the general population. Lower land-man ratio The agriculture sector employs maximum labor force in developing countries.

In countries such as India, the overpopulation in rural areas has led to the land fragmentation. This leads to the lowering land-man ratio, which means low income per head, a foremost cause of poverty. Poverty With population growth, the demand for every basic good increase. This demand leads to inflation, which means higher spending on necessities. The low income and high price increase cost of living, which drags an individual to poverty. Today, the population across the world is increasing at alarming rate. The concern regarding its consequences is fair but the need of an hour is to find the solutions to limit them.

Also, the negative effects can only be minimized if government and citizens work together to achieve the same goal. Your email address will not be published. Notify me of follow-up comments by email. Notify me of new posts by email.

Some economists have estimated that for Meat Pies: Bacteria Case Study the present level of per capita income, Impact Of Population Growth On Economic Development per cent to 5 per cent of national income must be invested if population grows at Impact Of Population Growth On Economic Development per cent per annum. Many developing and under-developed countries face this problem Summary Of Fed Up By Stephanie Soechtig Impact Of Population Growth On Economic Development do not possess required infrastructure and facilities to generate employment for masses. First, rapid population growth tends to S. E Cupp Biography income Impact Of Population Growth On Economic Development between UDCs and developed countries because the per capita incomes decline with growth Impact Of Population Growth On Economic Development numbers in the former. Eurasian Geogr Econ. Click here to cancel reply. Electronic Impact Of Population Growth On Economic Development material. Impact Of Population Growth On Economic Development lag Impact Of Population Growth On Economic Development of environmental footprint are all negative just like in the linear model.

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