ECONDEV5

LECTURE 5
Economic Development
Population Growth and Economic Development:

Causes, Consequences,
and Controversies
Copyright © 2009 Pearson Addison-Wesley. 6-1

All rights reserved.
WORLD POPULATION
7 BILLION
proofs
106,959,558
Copyright © 2009 Pearson Addison-Wesley.

6-4
• The Philippines population is equivalent
to 1.4% of the total world population.
• The Philippines ranks number 13 in the list
of countries (and dependencies) by population.
• The population density in the Philippines is 357
per Km2 (925 people per mi2).
• The total land area is 298,170 Km2 (115,124 sq.
miles)
• 44.4 % of the population is urban (47,278,672
people in 2018)
• The median age in the Philippines is 24.3 years.

6-5
POPULATION POPULATION Change
RANK COUNTRY
(As of July 1, 2016) (As of July 1, 2017)
1 China[a] 1,403,500,365 1,409,517,397 +0.4%
2 India 1,324,171,354 1,339,180,127 +1.1%

3 United States 322,179,605 324,459,463 +0.7%
4 Indonesia 261,115,456 263,991,379 +1.1%
5 Brazil 207,652,865 209,288,278 +0.8%
6 Pakistan 193,203,476 197,015,955 +2.0%
7 Nigeria 185,989,640 190,886,311 +2.6%
8 Bangladesh 162,951,560 164,669,751 +1.1%
9 Russia 146,864,513 146,989,754 +0.1%
10 Mexico 127,540,423 129,163,276 +1.3%
11 Japan 127,748,513 127,484,450 −0.2%
12 Ethiopia 102,403,196 104,957,438 +2.5%
13 Philippines 103,320,222 104,918,090 +1.5%
14 Egypt 95,688,681 97,553,151 +1.9%
15 Vietnam 94,569,072 95,540,800 +1.0%
16 Germany 81,914,672 82,114,224 +0.2%
17 Democratic Republic of the Congo 78,736,153 81,339,988 +3.3%
18 Iran 80,277,428 81,162,788 +1.1%
19 Turkey 79,512,426 80,745,020 +1.6%
20 6-6
+0.3%
Thailand All rights reserved.68,863,514 69,037,513
6-7
Estimated World Population Growth

All rights reserved. 6-8
World Population Growth, 1750-2050

World Population Growth Rates and Doubling
Times

World Population Distribution by Region,
2003 and 2050

6-12
Population Pyramids
• LDCs population pyramid is truly pyramid-

shaped with 40% younger than 19 years and
less than 5% over 65. Of the youth, 2 billion are
19 and younger and 400 million between 15-19
• MDCs population structure is more like a

cylinder with many middle-aged and elderly
individuals
Population Pyramids:
Ethiopia vs. U.S., 2005

6-15
Hidden Momentum of Population Growth
• Family planning takes many years to achieve two-child

family and eventually replacement fertility because
today’s children are future parents
• In Nigeria, If family planning began in 1990

• Two-child family may achieve in 2035 (45 years)
• Replacement fertility would eventually reach in 2150
(115 years)

Hidden Momentum of Population Growth

The Demographic Transition
• Stage I: High birthrates and death rates
• Stage II: Continued high birthrates; declining

death rates because of improved medicine
• Stage III: Falling birthrates and death rates,

eventually stabilizing due to improved medicine
and decline in the fertility rate
Demographic Transition in
Western Europe

Demographic Transition in LDCs

The Malthusian Trap
• Population grows at a geometric ratio
(e.g., 1, 2, 4, 8, 16, 32, etc.)
• Food supply increases at an arithmetic ratio

(e.g., 1, 2, 3, 4, 5, etc.)
• Hence, hunger, starvation, and death shall follow
• Remedy is to keep population growth in check

The Malthusian Trap
Growth rate (%)
5 Growth
4
B Population growth rate C
Trap
3 Trap
1
A
Growth Income per capita
0
Y 0 Y1 Y2 Y3 Y4
-1
Criticism of The Malthusian Trap
• Rapid income growth due to technological
advancement
• Greater food production due to land-intensive

technology and application of modern farm
inputs
• Economic growth faster than population growth,

resulting in the rise of per capita income over
time
Criticism of The Malthusian Trap
Growth rate (%)
5 Income growth rate
Population growth rate

3
0
Income per capita
-1
Cross-National Evidence
• Many LDCs have been able to lower population
growth rate while increasing income per capita
(e.g., China, Sri Lanka, Chile, Singapore)
• Still, there are countries with low or even

negative rate of economic growth, but high rate
of population growth (e.g., Kenya. Congo,
Philippines, Colombia, Venezuela)

Microeconomic Theory of Fertility
Demand for Children Equation
Cd  f (Y , Pc, Px, tx), x  1,..., n

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

Cd  f (Y , Pc, Px, tx), x  1,..., n
Under neoclassical conditions, we would expect:
Cd Cd
0 0
Y Px
Cd Cd
0 0
Pc tx

• In LDCs, the demand for children is high

because the cost of raising children is low and
they add to the family’s workforce to generate
income
– In LDCs, children are “investment goods”

– In MDCs, children are “consumer goods”

Population and Sustainable Development Framework
Population Production Development
Production/
Size Employment
Structure Goods and
Distribution Services
Productive
Capacity: Capabilities/
Fertility Natural Resources and Well being
Mortality Environment Longer life
Migration Physical Capital To achieve desired
Human Resources fertility
Others
Policies of Fertility Reduction
• Improve female education, and economic and

social role and status
• Provide of female non-agricultural wage

employment
• Rise in family income

Policies of Fertility Reduction
• Reduction in infant mortality, hence demand for

replacement children
• Provide old-age income security
• Expand schooling opportunities
• Establish family planning programs

Consequences of High Fertility
Population growth isn’t a real problem. The problems are

• Poverty and lack of development
• World resource depletion and environmental

destruction
• Uneven distribution of population
• Subordination of women

Consequences of High Fertility
• Slow or negative growth of per capita income

• Increased poverty and inequality
• Inadequate educational and health-care services
• Food shortage and hunger
• Environmental decay and loss of natural resources
• International migration

Some Policy Approaches
What can LDCs do to reduce fertility?
• Improve economic and social equality
• Invest in female education and job creation
• Educate people about negative consequences of high
fertility rate and provide family planning programs
• Provide incentives to reduce rural-urban migration
and brain drain

Some Policy Approaches
How can MDCs help LDCs reduce fertility?
• Improve international economic relations
• Research into technology of fertility control

• Financial assistance for family planning
programs

RH LAW
REPUBLIC ACT NO. 10354
• AN ACT PROVIDING FOR A NATIONAL POLICY

ON RESPONSIBLE PARENTHOOD AND
REPRODUCTIVE HEALTH

6-37
One child Policy in China
• No country has adopted a more
stringent policy on population
control than Communist China.
• Today China has more than 1
billion people but the growth
rate slowed to 1 percent.
Cost of One Child Policy in China
1. A lot of abortions of female unborn, as
China has a strong preference for male
children.
2. China has a huge growing senior
population and relatively young population
to support them.
3. Chinese men are having difficulty finding a
mate.
4. Traditional Chinese extended family has
been gradually disintegrating.
What is one child policy?
In the future, the Chinese will have
No brothers
No sisters
No nieces
No nephews
no aunts
No uncles
No cousins
Four grandparents, two parents doting one child
Was Malthus Correct?
But the increase in the population

today was due to:
1. decrease in infant mortality drop
2. Increase in the lifespan of
individuals
Countries Adopting Family-Planning Programs,
1960-1990


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LECTURE 5

Population Growth and Economic Development:

Copyright © 2009 Pearson Addison-Wesley. 6-1

Copyright © 2009 Pearson Addison-Wesley.

Copyright © 2009 Pearson Addison-Wesley.

2 India 1,324,171,354 1,339,180,127 +1.1%

Copyright © 2009 Pearson Addison-Wesley.

Copyright © 2009 Pearson Addison-Wesley.

Copyright © 2009 Pearson Addison-Wesley.

Copyright © 2009 Pearson Addison-Wesley.

• LDCs population pyramid is truly pyramid-

• MDCs population structure is more like a

Copyright © 2009 Pearson Addison-Wesley.

• Family planning takes many years to achieve two-child

• In Nigeria, If family planning began in 1990

Copyright © 2009 Pearson Addison-Wesley.

Copyright © 2009 Pearson Addison-Wesley.

• Stage I: High birthrates and death rates

• Stage II: Continued high birthrates; declining

• Stage III: Falling birthrates and death rates,

Copyright © 2009 Pearson Addison-Wesley.

Copyright © 2009 Pearson Addison-Wesley.

• Food supply increases at an arithmetic ratio

• Hence, hunger, starvation, and death shall follow

• Remedy is to keep population growth in check

Growth rate (%)

• Greater food production due to land-intensive

• Economic growth faster than population growth,

Growth rate (%)

5 Income growth rate

Population growth rate

• Still, there are countries with low or even

Copyright © 2009 Pearson Addison-Wesley.

Demand for Children Equation

Cd  f (Y , Pc, Px, tx), x  1,..., n

Copyright © 2009 Pearson Addison-Wesley.

Demand for Children Equation

Copyright © 2009 Pearson Addison-Wesley.

• In LDCs, the demand for children is high

– In LDCs, children are “investment goods”

Copyright © 2009 Pearson Addison-Wesley.

Population Production Development

• Improve female education, and economic and

• Provide of female non-agricultural wage

• Rise in family income

Copyright © 2009 Pearson Addison-Wesley.

• Reduction in infant mortality, hence demand for

• Provide old-age income security

• Expand schooling opportunities

• Establish family planning programs

Copyright © 2009 Pearson Addison-Wesley.

Population growth isn’t a real problem. The problems are

• World resource depletion and environmental

• Uneven distribution of population

Copyright © 2009 Pearson Addison-Wesley.

• Slow or negative growth of per capita income

Copyright © 2009 Pearson Addison-Wesley.

Copyright © 2009 Pearson Addison-Wesley.

• Improve international economic relations

• Research into technology of fertility control

Copyright © 2009 Pearson Addison-Wesley.

• AN ACT PROVIDING FOR A NATIONAL POLICY

Copyright © 2009 Pearson Addison-Wesley.

But the increase in the population