1. George Norton Agricultural and Applied Economics
Population Growth
George Norton Agricultural and Applied Economics
Virginia Tech

2. Objectives Discuss nature of population growth in the world
Consider determinants and consequences of rapid population growth and urbanization

3. Population issues to be discussed
Basic facts about population growth
Consequences of population growth
Causes of population growth
Policies to influence population growth and rural to urban migration

4. Has population increased at a fairly constant rate since prehistoric times?
B.C.
Today

5. World Population Number of People Time 3 million years ago 300 million
3 million years ago
300 million
1 AD
500 million
1650
1 billion
1800
2 billion
1930
3 billion
1960
4 billion
1975
5 billion
1987
6 billion
1999

6. Past and projected World population 12 11 10 9 8 7 6 5 4 3 2 1
Past and projected
World population

7. World Population What is the present world population?
What is the current growth rate and is the growth rate currently at its historical peak?

9. When would world population double at the current growth rate?
70/1.2 = 58 years
Is the growth rate likely to remain at 1.2 percent? Why or why not?

10. Why has population increased faster in developing countries today that it did in early stages of U.S. development?

12. Are population growth rates more likely to increase rather than decrease over the next 10 years?

13. When will the world population stop growing and at what population?
Maybe in 2150 at billion;
By 2050, expect about 9 billion

14. Why does population grow when growth rates are declining?
Recent rapid growth
means young population
with many in child
bearing years

15. Population pyramid

16. Let’s examine: Determinants of birth rates
Economic factors important in affecting birth rates
3) Consequences of rapid population growth

17. Determinants of birth rates
Income (economic factors)
Culture and social factors
Birth control
Education
Religion
Wars

18. Why are economic factors important in affecting birth rates?
Children provide labor in agriculture
Children provide social security
Children are a consumption good
Income implies value of time so number of children
Quantity / quality tradeoff

19. In what sense is population growth a substitute for missing institutions and markets?

20. Missing Institutions and markets
Insurance
Medical
Life insurance
Disability
Natural disaster
Theft
Social security
Government
Employer

21. Gender bias Culture and inheritance laws
Low female wages reduces opportunity cost of children
Education of females

22. Externalities
What externalities might be involved with fertility choices and why?
Costs of certain public goods such as schools and infrastructure might exceed private costs
Environmental effects
Family structure

23. What are the consequences of rapid population growth?
Negative
Food
Difficult to educate
Environment
Age dependency
Jobs
Capital shallowing
Investment diversion
Positive
Labor
Economies of scale
Market
Intellectual base for ideas and innovations
Effect on demand for technologies

24. What are some policies that influence population growth?
Policies for social and economic improvement
Social security system
Family planning
Female education

25. Urbanization also increasing with rural to urban migration
Nature of migration
Why migration occurs
Consequences
Policy implications

26. Rural to urban migration
1980’s and 90’s– population growth in LDC’s averaged 2.1%
But, urban population growth averaged 3.5% (in many countries, 6 to 8%)

27. Why is rural to urban migration good and why is it bad?
Labor for industry (efficient use of resources)
Education: costs and benefits
Larger markets
Bad
Unemployment
Housing & Public services
Environment

28. Why do people migrate from rural to urban areas?
Economic factors
Benefits of move
Costs of move
Planning horizon
Social & cultural factors

29. Who tends to migrate? Age of migrants? Education of migrants?
Young
Education of migrants?
Better educated
Marital status of migrants?
Single

30. Harris-Todaro Model of Migration
Potential migrants evaluate the “potential” or expected gains from migration versus the costs
Expected gains: real income differential times the probability of receiving a job offer
Probability is inversely related to the rate of unemployment
Migration rates in excess of urban job growth rates are expected in this model

31. What is the urban informal sector?
Why is the informal sector both good and bad for developing countries?

32. What policies can affect rural to urban migration?
Improve services in rural areas (education, health, etc.)
Remove bias in economic policies
Jobs in rural areas

33. Conclusions
Population growth and R-U migration have been rapid in developing countries in recent years
Many causes but several are economic and institutional
Effects are positive and negative
Public policies can influence pop growth and R-U migration rates