population growth

Question 1

common reasons of higher birth rates in developing countries

Answer 1

▪ Limited access to education for women
▪ relying on children for labour or support in old age
▪ Lack of family planning services
▪ Cultural and religious beliefs

Question 2

Birth rates in Africa

Answer 2

o The highest birth rates in 1990 and 2017 were most commonly found in Africa
o Many African countries also show little change in fertility rates in the last 30 years

Question 3

Findings from the UN World Population Prospects Report

Answer 3

o World population projected to reach 8.6 billion by 2030
o Future population growth will be concentrated in developing countries
o Population growth will be especially concentrated in Africa

Question 4

The Demographic Transition in Development - Population Pyramids

Answer 4

o In low-income countries - and middle-income countries in the past - the population is heavily skewed towards younger groups
o In high-income countries the distribution tends to be more uniform

Question 5

Youth Dependency Ratio in developing countries

Answer 5

▪ The Youth Dependency Ratio: The ratio of children under age 15 to adults of working age (15-64)
▪ 42% of the population in low-income countries
▪ 17% of the population in high-income countries
o An increasing population growth rate will lead to a larger number of economically inactive individuals (mostly children)
o It will become more difficult for those who are working to support those who are not

Question 6

common pattern underlying changes in population growth in many of today’s high-income economies

Answer 6

▪ Stage I: High birthrates and death rates
▪ Stage II: Continued high birthrates, declining death rates
▪ Stage III: Falling birthrates and death rates, eventually stabilizing

Question 7

Malthusian Trap

Answer 7

▪ The population is rising due to high birth rates
▪ production is subject to diminishing returns
▪ Only where population declines will income per capita increase – if not, the economy will be stuck at a low-income equilibrium (poverty trap)
o poor countries will always be stuck at a subsistence equilibrium without preventative checks
o More concerning is what Malthus calls positive checks on population growth - including famine, war and disease

Question 8

Poverty Trap Graph

Answer 8

Graph on slides
▪ Only if income per capita can passT will the economy escape the population trap

Question 9

Criticisms of the Malthusian Population Trap

Answer 9

▪ overlooks the role of technological progress
▪ differences in productivity important in explaining differences in income
▪ With improvements in technology and productivity, the growth rate of income could potentially remain above the population growth rate

Question 10

Reasons why Malthusian Population Trap is still useful

Answer 10

o Many believe that the Malthusian trap holds in poor countries today, although there is no conclusive empirical evidence linking population growth to income-per-capita
o It possible that such traps have occurred in historical past - evidence of a rise in income-per-capita following large scale ‘positive’ checks
▪ The bubonic plague - killed between 30% and 60% of Europe’s population and was followed by a sharp rise in income-per-capita

Question 11

Quantity vs ‘Quality’ of Children with economic development

Answer 11

o Economic development may alter the costs and motivations for having children (Quality) and (Quantity)
For example,
▪ production is (human-) capital intensive more educated/skilled children may be desirable
▪ In modern societies, raising children is expensive so fewer children may be optimal
▪ reduction in child mortality
▪ social protection to the elderly

Question 12

A Model of the Demand for Children - equation

Answer 12

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 other goods relative to children

Question 13

A Model of the Demand for Children - Correlation

Answer 13

▪ The higher income, the greater the demand for children (children are normal goods)
▪ The higher the net price of children, the lower the quantity demanded
▪ The higher the prices of all other goods relative to children, the greater the quantity of children demanded (children and other goods are substitutes)
▪ The greater the strength of tastes for goods relative to children, the fewer children are demanded
Note: these relationships may be written as:
𝜕Cd/𝜕𝑌 > 0
𝜕Cd/𝜕𝑃𝑐< 0
𝜕Cd/𝜕𝑃𝑥> 0
𝜕Cd/𝜕𝑡𝑥< 0

Question 14

The Microeconomic Household Theory of Fertility - Illustration

Answer 14

Graph on slides

Question 15

Conflicting views on whether population growth should be a cause for concern - Argument 1: Population growth: “It’s not a real problem”

Answer 15

The real problem is not population growth but the following:
▪ Under-development
▪ environmental destruction
▪ Population distribution

Question 16

Conflicting views on whether population growth should be a cause for concern - Argument 2: “Population growth is a real problem”

Answer 16

Theoretical arguments e.g., Malthus’ Population Trap
Empirical arguments:
▪ Lower economic growth
▪ Adverse impact on education and health - food insecurity
▪ Impact on the environment

Question 17

Policy Approaches to Reduce Fertility

Answer 17

Fertility will be lower where there is:
o More female employment
o Less reliance on unskilled labour in production – structural transformation
o Reductions in infant mortality - better healthcare
o Development of old-age and social security plans – better social protection
In addition, the following are also likely to be effective:
o Affordable prices and better information on contraceptives and family planning
o Policies that have the effect of reducing male-child preference