Population and economic development is a two way relationship

Population Growth and Economic Development

population and economic development is a two way relationship

As a result, the general picture of the relationship between population growth and . Population growth affects economic development in two ways: First. This was in the context of an event on inclusive growth, following the The economy and a healthy population, a two way relationship. growth. Most empirical analyses of the relationship between population and economic growth do not .. Is it not possible that there was a two-way relation-.

Forget moral restraint, was Malthus wrong? 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].

population and economic development is a two way relationship

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 20th 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. 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].

Of course, the assertion that young people are more productive is open to contradiction especially by their elders. However, few would question the view that they are more adaptable and easier to train for new jobs.

A young population should also provide a larger flow of school-leavers able to start work in the industries where labour is most needed. The difficulty and expense involved in the movement of workers between industries are thus avoided. The ability of workers to move easily from one job to another is called mobility of labour. It is particularly important in economies such as that of India which must respond not only to changes of demand at home but also to foreign demand and competition.

population and economic development is a two way relationship

Moreover, this group bears the burden of supporting the non-working members of the community. If a larger proportion of the population is either retired or at school, the extra cost of pensions or education falls on relatively smaller numbers who are working and earning. The first is the population density in relation to natural resources and the second is technology. Moreover, if the society has a limited stock of capital, labour may have to be substituted for capital in which case the production function will exhibit the law of diminishing returns.

This occurs if the variable factor is labour, while capital is a fixed factor. In studying the population problem of LDCs we have to take note of the absolute size of the population base. The size of the population base is of great importance as it affects the total scale of the economy.

A growing population means a growing market for most goods and services and we know that division of labour is limited by the extent of the market. A potentially expanding market may stimulate entrepreneurs to invest more and more in capital goods and machinery.

Business activity will be spurred as a consequence. And more income and employment will be created in the process. Moreover, it will provide an outlet for the products of efficient large-scale, mass-production industries. The net effect may be favourable to the country. Of course, the size of the domestic market of a country does not only depend on the numbers, but also on the per capita income level. But given the same low level of income per head, a country like India offers a more favourable environment for setting up heavy capital goods industries which depend so much on the economies of scale for their success.

Meier and Baldwin Say-"Economic development is a process whereby an economy's real nation income increases over a long period of time.

Population, Sustainability, and Malthus: Crash Course World History 215

Meier-" Economic development is the process whereby the real per- capita income of a country increases over a long period of time, subject to the stipulations that the number below an absolute poverty line does not increase and the distribution of income does not become more 4 M.

Development is, therefore, not only Economic Growth but Growth plus Change-social, cultural and institutional as well as economic. Whatever the specific components of this better life, development in all societies must have at least the following three objectives6.

The Relationship Between Population and Economic Growth in Asian Economies

Difference Between Economic Development and Economic Growth Economic development refers to the problems of under developed countries and economic growth to those of developed countries. Maddison makes the distinction between the two terms in this sense when he writes: The problem o f underdeveloped countries are concerned with the development of unused resources, even though their uses are well-known, while those of advanced countries are related to growth, most of their resources being already known and developed to a considerable extent8.

Schumpter makes the distinction clearer when he defined development, "as a discontinuous and spontaneous change in the stationary state which forever alters and displaces the equalibrium state previously existing; while growth is a gradual and steady change in the long run which comes about by a gradual increase in the rate of savings and population. On the other hand, economic development is a wider concept than economic growth.

population and economic development is a two way relationship

It is taken to mean growth plus change. It is related to qualitative changes in economic wants, goods, incentives, institutions, productivity and knowledge or the "upward movement of the entire social system" However these two words may be used as synonyms.

Population Growth and Economic Development The consequences of population growth on economic development have attracted the attention of economists over since Adam Smith wrote his Wealth of Nations. Adam Smith wrote," The annual labour of every nation is the fund which originally supply it with all the necessaries and conveniences of life. But their fears have proved unfunded because the growth of population in 7 A.

The economy and a healthy population, a two way relationship – Sheffield DPH

Maddison, Economic progress and policy in Developing countries, The Thory of Economic Development, Population growth has helped the growth of such economies because they are wealthy, have abundant capital and scarcity of labour. Population growth affects economic development in two ways: First, by promoting economic development and second, by retarding economic development.

A Factor Promoting Economic Development Kuznets, Lewis, Meier, Hirschman and other economists have shown that the growth of population has been an important factor in the economic growth of developed and under developed countries in the following ways Kuznets in his study Modern Economic Growth has pointed out that substantial rates of population growth in Europe have led to high rates of increase in total product and per capita product.

The growth of national product in turn, has been due to the enormous addition to population which has led to large increase in working labour force. Kuznets points out that, "in modern times growth in population has been accompained by growth in aggregate output for many countries so large that there was also a marked secular rise in per capita product. It is improvement in the quality of labour which increases productivity per unit of labour.

This means a rise in the efficiency of labour which leads to greater output per unit of labour. Studies made by schultz, Harbison, Kendrick, Solow and a host of other economists reveal that one of the important factors responsible for the rapid growth of American Economy has been the increase in labour productivity. According to 11 Ibd.

Galbraith, a large part of America's industrial growth has been from improvement brought about by improved men. The latter, in turn, raises the national product. Leibenstein and other economists are in favour of the population growth is one of the main obstacles to economic development. But the consequences of population growth on the development of Under Developed Countries UDCs are not the same because the conditions prevailing in these countries are quite different from those of the developed economies.

These economies are poor capital scare and labour- abundant. Population growth adversely affects their economic development in the following ways Economic development depends upon investment. In UDCs the resources available for investment are limited. Therefore, rapid population growth retards investment needed for higher future consumption. This is particularly the case where the 12 M. With rapidly rising population, agricultural holdings become smaller and unremunerative to cultivate.

There is no possibility of increasing farm production through the use of new land extensive cultivation. Consequently, many households continue to live in poverty. In fact, rapid population growth leads to the overuse of land, there by endangering the welfare of future generations.

As population increases, the proportion of workers to total population rises. But in the absence of complementary resources, it is not possible to expand jobs. The result is that with the increase in labour force, unemployment and under-employment increases. As a result, reduces income, savings and investment. Thus capital formation is retarded and job opportunities are reduced, thereby increasing unemployment.

Moreover, as this labour force increases in relation to land, capital and other resources, complementary factors available per worker decline.