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Economics of population

Economics of population. Aravinda Guntupalli. Facts on world population. Total world population: 6.1 billion About 75% of people live in developing countries About 60% of the population lives in Asia and Oceania About 40% of people live in only 15 countries

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Economics of population

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  1. Economics of population Aravinda Guntupalli

  2. Facts on world population • Total world population: 6.1 billion • About 75% of people live in developing countries • About 60% of the population lives in Asia and Oceania • About 40% of people live in only 15 countries • By 2200, over 90% of population will live in what today are developing countries

  3. Topics • Demographic measures • Issues of population growth • Population growth in the world • Past • Present • Theories of population

  4. Birthrate Death rate Rate of natural increase Life expectancy at birth Dependency ratio Median age of the population Demographic measures

  5. Where is the data coming from? • Census • Vital statistics • Surveys • Parish records • Archeological data

  6. Terms used • Fertility • Mortality • Migration • Age structure

  7. Components of population Population in 2004 + Births – Deaths + Immigrants – Emigrants -------------------------- = Population in 2004 • Natural increase = births-deaths • Net migration= Immigrants-emigrants

  8. Issues of population economics • Dependency population • Infrastructure • Availability of resources • Ageing • Old age support • Inequality • Savings and consumption • HIV/AIDS

  9. Contrasting problems • Different parts of the world face different problems with regard to population growth. • Many countries are struggling to decrease population whereas some are in the hope to increase their population

  10. Dependency problems • Old age structures and young age structures both create problems with supporting dependents; they are just different problems. • Young age structure requires expanding labor markets, investments in education • Investments in older people less likely to enhance productivity

  11. Population decline and economic growth • Reduction in birthrates can raise per-capita income in 2 ways • lower dependency ratio • low consumption and high savings • Shift of labor force investment from capital widening to capital deepening

  12. Ageing and economic burden in the EU The process of ageing is putting European social services under considerable stress: • Old age expenditure (as a % of GDP) has risen significantly since the 1980s and remained stable during much of the 1990s • Old age expenditure represents two fifths of all social expenditure (highest incidence in Italy, Greece, and Spain)

  13. Percentage of elderly in the EU and US

  14. Population Growth, 1750-2200: World, Less Developed Regions, and More Developed Regions

  15. Population Pyramids: Less Developed and More Developed Countries; 1998

  16. Malthusian population model • Population tends to grow at a geometric rate, doubling every 30 to 40 years • Food supplies only expand at an arithmetic rate due to diminishing returns to land (fixed factor) • Malthusian population trap: countries would be trapped in low per-capita incomes (per capita food), and population would stabilize at a subsistence level. • Preventive and positive checks • Technological progress is not considered

  17. The Demographic Transition • Stage I: birthrates and death rates are close and high • Stage II: continued high birthrates, declining death rates • Stage III: falling birthrates to reach death rates • Stage IV: both birth and death rates are close again and low

  18. Demographic transition

  19. The present demographic transition in developing countries Stage II already occurred in most of the developing world,but with higher birthrates than in the developed world. • Stage III: • has been similar to developed countries for some developing countries like Taiwan, South Korea, China,Chile, Costa Rica • has not occurred yet for other countries mainly in Sub-Saharan Africa and the middle east.

  20. Rapid and Slow Transition • Rapid transition • Japan • South Korea • Taiwan • Singapore • Thailand • Indonesia • Slow Transition • Pakistan • India • Bangladesh • Philippines • Papua New Guinea

  21. Miracles of rapid transition in East Asia • Rapid demographic change creates windows of opportunityfor accelerated economic growth • Rapid growth of labor force • Saving and investment • Changing roles of women • Human resource investment

  22. Thank You

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