Population Growth and Economic Development: Causes, Consequences, and Controversies Lecture 5 1

The Basic Issue: Is Population Growth Good or Bad? Argument: Population is a serious problem in developing countries? Theories: Demographic transition Malthusian model Microeconomic theory of fertility Facts: Some empirical evidences Policies: What can developing countries do? There are six major issues concerning population growth and quality of life.

Population Growth Is A Problem! Population and the Global Crisis Poverty, low levels of living, malnutrition, ill health, environmental degradation, etc. Population-poverty cycles Population growth, saving, per capital income growth 7 Negatives Lower Y per head Poor people bear burden of population growth Large population limits educational opportunities Health of women is harmed Family food is limited Environmental degradation occurs Illegal international migration and over urbanization

The Demographic Transition Stage I: high birthrates and death rates Stage II: continued high birthrates, declining death rates Stage III: falling birthrates and death rates, eventually stabilizing

The Malthusian Model

Criticisms of Malthus’ model

The Household Model The microeconomic household theory of fertility

Demand for Children Equation Where Cd is the demand for surviving children Y is the level of household income Pc is the “net” price of children Px is price of all other goods tx is the tastes for goods relative to children

Demand for Children Equation Under neoclassical conditions, we would expect:

Population Growth: Numbers

Population Growth: Structures

Geographic Region

Fertility & Mortality Trends Natural Increase Fertility & Mortality Net International Migration

Age Structure & Dependency Burden

Hidden Momentum of Population Growth High birth rates cannot be altered over substantially Age Structure

Implications of Development and Fertility Increase in education for women and changing their status in society Increase in female non-agri wage employment A rise in family income levels Reduction in infant mortality rate Development of old age and other social security schemes Expanded schooling opportunities quality vs quantity

Some Policy Approaches What developing countries can do: Long run: increase the price of child opportunity cost of mother’s time Cost of educating child Short run: control fertility Persuade people Family-planning programs Economic incentives and disincentives Redistribute population Coerce people Raise women’s social and economic status