Population Growth and Economic Development: Causes, Consequences, and Controversies Lecture 7 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.

1.1 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

1.2 Population Growth Isn’t A Problem! Other Issues Underdevelopment Resource Depletion and Environmental Destruction Population Distribution Subordination of Women False Issue Neocolonial dependence theory Desirable Consumer Demand Economies of Scale Labor Supply (sufficient-low cost) Non-economic reasons

2.1 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

2.2 The Malthusian Model

Criticisms of Malthus’ model

2.3 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:

3.1 Population Growth: Numbers

3.2 Population Growth: Structures

3.3 Population Growth: Relations Population growth & income Population density & income Population growth & structure (Number & Structure) Producer & consumer

4. 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