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Assessing the Relationship between Population Growth and Economic Growth. Karen Chang Chih Hua Chen Jessica Chen Derek Shum Gabriela Alcaraz Dennis Yue. Overview. Problem: High population growth in developing countries Solution: Economic growth
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Assessing the Relationship between Population Growth and Economic Growth Karen ChangChih Hua Chen Jessica ChenDerek Shum Gabriela AlcarazDennis Yue
Overview • Problem: High population growth in developing countries • Solution: Economic growth • Expanded labor force that utilizes the productive capacity of women • Reduces the need for large families to perform the tasks of subsistence
Our Research • Developing countries: higher marginal productivity • Average annual growth rate during 1965-99: • 4.1% in low-income countries • 4.2% in middle-income countries • 3.2% in high-income countries • Trend: low-income countries will one day exceed the GDP of today’s high-income countries • However, population growth in developing countries > developed countries • Large increase in GDP in developing countries GDP growth is offset by faster population growth • Negative correlation: economic and population growth rates
Opposing Views • As income increases, both the birth and death rates decrease. • Since these forces are offsetting, the rate of population growth is independent of the rate of economic growth.
Variables in the Analysis • Fertility : Birth rate • Economic Growth : GDP per Capita Growth • Regional Dummy Variables - to control for cultural differences across regions, religion dummy variables were incorporated in order to account for regional/cultural and religious differences which may influence birth rates. • Secondary school enrolment of females: incorporated based on the findings that higher female education levels contribute to lower birth rates
Regression model results excluding Europe and N.A., Education and Catholic
Regression birthrate vs. regional dummies, GDP and education
Regression model considering interaction between the variables
Conclusion • Negative relationship between economic growth and population birth rates • Female education levels a negative relationship with population birth rates • Religions that discourage the use of birth control such as Catholicism and Muslim religions have a significant positive effect on birth rates