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The Global Economy > Population Growth > Flashcards

Population Growth Flashcards

1
Q
  1. What is the overall population growth trends
  2. Growth rate 1965-1970 v 2015-2020
A

Grew rapidly early -
Growing but at a slower pace since 1950.

  1. 2.1% v 1.1%
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2
Q

What region accounts for most of the growth of population, and what will other regions experience

A

Sub-Saharan Africa

Other regions will experience decreasing population numbers.

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3
Q

2/3 of projected growth through to 2050 is driven by what?

A

Current age structure

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4
Q

Current age structure that is going to drive 2/3 growth to 2050.

A

More young people entering their reproductive years compared to their parent’s generation.

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5
Q

In some parts of the world, populations are relatively young. Proof?

A

People in working ages (25-64) is growing faster than other age groups.

creating a demographic dividend (increase in TOTAL SUPPORT RATIOS)

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6
Q

As mentioned, despite global population increasing, and Sub-Saharan Africa accounting for most of the growth…

Many countries are experiencing a decrease in population size. Why? (2)

A

Low fertility and high emigration

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7
Q

Demographic transition characteristics

A

High to low fertility and death rate, creating an aging population.

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8
Q

3 Facts to support the demographic transition globally (of low death/birth rate=aging population)

A

Life expectancy increased to 72.6 in 2019

More 65 year olds than children under 5, in 2018. (Supports low fertility and longer life expectancy)

2019-2050, number of 65> expected to more than double

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9
Q

What will this population aging impact as a result of increased life expectancy effect?

A

Potential support ratio:
People of working age (25-64) per persons 65 years>

Think of it as not enough carers for older people as more old people.

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10
Q

3 Phases of demographic transition (Lee)

A
  1. Mortality and fertility decline (low death/birth)
  2. Population growth rates first accelerate, then slow again.
  3. Society moves toward low fertility, long life (old population)
    Low birth rate, low death rate
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11
Q

When did this mortality transition begin (part of phase 1 of demographic transition)

A
  1. A persisting decline in mortality.

However many low-income populations did not begin the mortality decline until 20th century (rapid gains in life expectancy)

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12
Q

Fertility transition (part of phase 2 of demo transition) population growth increases but then falls.

Discuss 2 models relating to this transition

A

QQ model-Couples wish to have a certain number of surviving children so negative YED for quantity, positive for quality.

Becker’s demand for children

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13
Q

Becker’s demand for children- explain the 2 ideas

A

As we see technological progress> labour productivity improves (in women in particular) > value of time increases> relative cost of children increases so we have less children.

Rising income also moves demand to non-agricultural goods e.g education for children, so cost of children increase, reduce quantity of children too.

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14
Q

Shifts in age distribution: 3 support ratios

A

Child support ratio: number of adults in working age divided by young population (0-14)

Old age support ratio-working age divided by old age

Total support ratio-working age pop divided by young population and old population together (0-14, and 65+)

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15
Q

First phase: mortality down, fertility remains high

Second phase: fertility down- working age grows faster than population as a whole. (Total support ratio increase)

Third phase: life expectancy increases, fertility down.

A
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16
Q

First phase, what ratio is affected, and negative?

A

Mortality transition, FERTILITY REMAINS HIGH.

Less mortality in young ages, increases child proportion in population (CHILD SUPPORT RATIO FALLS)

Families/gov may struggle to meet educational goals due to more children.

17
Q

Second phase, what ratio is affected and negative

A

Fertility transitions (falls)

Working age population grows fastest. Total support ratio increases. (Demographic dividend-advantages HAPPENING IN REAL LIFE as mention before, 2/3 growth through current age structure of increased working age)

Negative- this rapidly growing labour force can cause rising unemployment

18
Q

Third phase- society moves to low fert, long life and old population.

  1. What happens to dependency ration and effect of it? (2 possible outcomes)
  2. Concern of third phase?
  3. What is important to note about the third phase?
  4. How to solve this population aging?
A

Old and fertility low, thus slowing growth of working population (no new people being born to grow up)

So.. Dependency ration increases (less working age to support more old!)

  1. Increase dependency ration means greater burden on working age population who have to support old.

If elder contribute themselves, can cause lower saving rates. (Lower burden for working age who don’t have to save as much)

  1. Healthcare strains for old people e.g dementia etc.
  2. No country in the world has completed the 3rd phase of the demographic transition!! No benchmark.
  3. Ensure health care robust for old, and review social security arrangements (e.g is 64 too early to retire? If we make retirement age older, support ratio improves)
19
Q

Pessimists of population growth relationship with economic growth (ONES THAT SAID BAD FOR ECON GROWTH)

A

Malthus- believed economic growth gains are eaten up by population growth.

Pop rate grows at faster rate than food supply, so food prices increases and so consumption falls.

20
Q

Pessimists of population growth on economic growth

Coale and Hoover (2), and what is escape?

A

Fertility increases, proportion of children increases, so no immediate increases in labour supply. So no short term economic growth.

Children consume more than produce obviously, so costly

Only escape is technological progress to prevent labour productivity to keep wages higher to prevent food prices rising.

21
Q

Optimists of population growth- 3 points

Population growth increases economic growth

A

Smith, Marshall, Kuznets, Hirchman

Large population creates E.O.S in production and consumption, demand increases.

Population facilitates technological innovation. (UGT- function of pop- demand more ed, higher returns to ed (innovation)

Piketty- economic growth includes a purely demographic component (MORE PEOPLE DEMAND MORE) and a purely economic component which allows for improvement in standard of living.

22
Q

Optimists view of low and high income countries experiencing population growth.

A

Low income countries in short run: Fall in economic growth due to population growth-cost of children (Coale & Hoover)

Long run: more young people becoming working adults (demographic dividend as mentioned before-good for working however risk of unemployment if lack of jobs)

High income: are experiencing low population growth means an ageing population (lower support ratio as more old people)

23
Q

So fertility and population growth are high in least developed countries (SS AFRICA-1st stage), demographic transition (fertility is falling and populations ageing) everywhere else (2nd and 3rd)

Why is that a problem

A

Population ageing represents a significant achievement but many developing countries will grow old before they grow rich

24
Q

Policy: How to solve demographic dividend (more people entering working age) PHASE 2

A

As more people entering working age, 2nd stage, more risk of unemployment.

Investment in creations of new jobs (solve fertility transition concern) and education (solve mortality transition concern)

25
Q

Policy: How to address population aging (2) PHASE 3

A

Ensuring health care systems are capable to care for a growing older population (dementia and other mental health problems)

Existing social security arrangements need to be reviewed e.g rules for retirement need to be redefined to account for balance between duration of working lives and duration of retired life. (E.g is 64+ too low for retired?- solve by making people work longer to improve support ratio)

26
Q

Why do we need policy to reduce fertility? (Phase 2)

2 reasons why

A

To slow population growth. But has also accelerated demographic transition so consider… (Phase 2)

  1. Externalities-the social costs are greater than private costs, so if parents do not fully internalise costs of children, likely to have higher fertility than optimal. Can cause

-overcrowding and tragedy of commons-gov spending on social welfare could’ve been spent elsewhere

-decrease wages- labour supply increases, wages fall.

2.Incomplete information- contraception info poor. So they have more than optimal and would have less if better informed.

The Global Economy (31 decks)

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