DEVELOPMENT ECONOMICS

CHAPTER 6
Population Growth and Economic Development
Todaro & Smith • Economic Development, 13th Edition

Chapter Overview
This chapter examines one of the most consequential issues in development economics: the
relationship between population growth and economic development.
Key coverage: historical and projected world population trends; demographic transition;
Malthusian population trap; microeconomic household theory of fertility; consequences of
high fertility; and policy approaches for developing and developed countries.
A comparative case study of Burundi and Rwanda illustrates how population policy choices
— embedded in broader development strategies — can diverge dramatically.

6.1 Introduction: Population in Context

Global population has exploded from roughly 5 million in 8000 BCE to over 7.7 billion in 2019 — and
the bulk of this growth has been concentrated in the developing world. The central question is not
simply how many people exist, but how population dynamics affect prospects for development —
expanding (or restricting) people's capabilities, incomes, health, and freedom to choose.
Development requires improving levels of living, self-esteem, and freedom. High population growth in
low-income countries can intensify existing development problems — not as a primary cause, but as a
powerful multiplier. The chapter explores: (a) why populations grow rapidly in poor countries; (b) why
growth eventually slows; and (c) what happens when growth turns negative before countries become
rich.

6.2 Population Growth: Past, Present, and Future

6.2.1 World Population Growth Throughout History
Population growth was negligible for most of human existence — growing at barely 0.002% per year for
millennia. The turning point came with the Industrial Revolution (mid-18th century), accelerating further
in the 20th century as medical technology dramatically reduced death rates while birth rates remained
high.

Year Population (millions) Annual Increase (%)

8000 BCE 5 -
1 CE 175 0.13
1500 450 0.12
1800 950 0.25
1900 1,650 0.56
 1950 2,536 0.86
1970 3,700 2.01
2000 6,145 1.43
2018 7,621 1.14
2050 (forecast) 9,800 0.79
2100 (forecast) 11,200 0.27
Table 6.1 — Estimated World Population Growth Throughout History

Key Insight: The Doubling Time Explosion

Before 1650: it took roughly 36,000 years (about 1,400 generations) for world population to
double.
At current growth rates: world population would double in about 58 years — just two
generations.
Root cause: Rapid technological advances in medicine, improved nutrition, and modern
sanitation slashed death rates, while birth rates — especially in the least-developed
countries — fell much more slowly.

6.2.2 Structure of the World's Population

World population is highly uneven across regions. Over three-quarters of humanity lives in developing
countries. Africa's share of world population is steadily rising — from 15% in 2010 to a projected 22%
by 2050 — while Europe's share is falling.

Key Demographic Concepts

KEY TERM DEFINITION
Crude Birth Rate Number of live births per 1,000 population per year.
Death Rate Number of deaths per 1,000 population per year.
Rate of Population Net percentage yearly increase due to natural increase and
Increase international migration.
Natural Increase Excess of births over deaths (fertility minus mortality).
Total Fertility Rate Average number of children a woman would bear if she lived through
(TFR) all childbearing years at prevailing age-specific fertility rates.
Under-5 Mortality Rate Deaths among children aged 0–5 per 1,000 live births.
Life Expectancy at Birth Expected years of life for a newborn under prevailing mortality
conditions.
Youth Dependency Proportion of the population under age 15 relative to the working-age
Ratio population (15–64).

Globally, fertility has been falling: by 2017, the world TFR was 2.4. However, major disparities persist.
Niger had 7.2 births per woman in 2017; South Korea had 1.1. Many sub-Saharan African countries
remain in the high-fertility, slowly-declining category.
6.2.3 Hidden Momentum of Population Growth
Even after birth rates decline substantially, population continues growing for decades. This is the
hidden momentum of population growth — one of the most underappreciated concepts in demography.
Two reasons explain this phenomenon:
• Social and institutional forces that have produced high birth rates cannot be altered overnight.
• Age structure: Large current cohorts of young people will eventually become parents. Even if
each couple has only two children, the total number of births remains high because there are
many more potential parents than in the previous generation.

Population Pyramids Explained

A wide pyramid base (large young cohorts relative to older cohorts) = rapid population
growth expected.
In 2016, low-income country pyramids resembled mid-income country pyramids from 1965
— showing progress but still significant momentum.
High-income countries now show 'inverted' bases — smallest cohorts at the bottom —
predicting long-term population decline absent immigration.

Demographic Dividend
KEY TERM DEFINITION
Demographic Dividend The high economic growth achievable when the working-age
population share is significantly greater than the non-working-age
share, freeing up resources for investment in human capital.
The demographic dividend is a finite window of opportunity that occurs during the transition. Countries
like China (1980s–2000s) and India (currently) benefit from this window. Sub-Saharan Africa is
approaching it — but whether it will be seized or missed depends on policy choices, especially in
education and employment.

6.3 The Demographic Transition

KEY TERM DEFINITION
Demographic The phasing-out process of population growth rates from Stage 1
Transition (high birth/death rates) through Stage 2 (high births, falling deaths) to
Stage 3 (low births and deaths, stable population).
Replacement Fertility The TFR at which a population exactly replaces itself over generations
— approximately 2.05–2.1 in developed countries, higher in
developing countries due to lower survival rates.

Stage Characteristics Population Trend

Stage 1 (Pre-modern) High birth rates + high death Stable or very slow growth.
 rates; famine, plague, disease
prevalent.
Stage 2 (Early transition) Death rates fall sharply Explosive population growth.
(medicine, sanitation, nutrition) Peak growth rates exceed 2%
but birth rates remain high. per annum.
Large gap = rapid growth.
Stage 3 (Late transition) Birth rates gradually decline as Stable or slow-growing
modernisation, female population. Replacement
education, and urbanisation fertility approached.
take hold. Both birth and death
rates low.
Table: Three Stages of the Demographic Transition (Western European historical pattern)

In developing countries, death rates fell much faster than in 19th-century Europe because imported
medical technology was immediately available. The result was a steeper gap between birth and death
rate curves — and thus higher peak population growth rates (>2% per year) than Europe ever
experienced.

Exam Tip: Demographic Transition vs. Malthusian Trap

These are two distinct frameworks. The demographic transition is a descriptive empirical
model of how fertility changes with development. The Malthusian trap is a theoretical
equilibrium model showing how poverty and population growth can reinforce each other.
Be ready to compare and contrast: the Malthusian trap focuses on per capita income as the
driver; the demographic transition focuses on social and structural changes (education,
urbanisation, health, gender).

6.4 Causes of High Fertility: Malthusian and Household

Models
6.4.1 The Malthusian Population Trap
Thomas Malthus (1798) argued that population grows geometrically (doubling every 30–40 years) while
food production grows only arithmetically (due to diminishing returns to land). The result: per capita
incomes tend toward subsistence — the Malthusian Population Trap.

The Malthusian Diagram (Figure 6.6)

X-axis: Level of income per capita.
Y-axis: Growth rates (population growth rate vs. total income growth rate).
Point S (stable low-level equilibrium): where population growth rate equals income growth
rate at subsistence income. Any deviation is self-correcting — the economy is pulled back to
S.
Point T (threshold): if income per capita reaches T, income grows faster than population
permanently — self-sustaining growth becomes possible.
 Escaping the trap requires: (1) technological progress (shifts income curve up) or (2) social
progress that shifts population curve down.

6.4.2 Criticisms of the Malthusian Model

Two main criticisms undermine the Malthusian model's relevance to modern developing countries:
• It ignores technological progress. Increasing rather than decreasing returns to scale have
characterised the modern growth era. Technology raises land productivity without increasing its
physical quantity.
• It assumes a positive correlation between population growth and per capita income — but
empirical evidence shows no such rigid relationship. Fertility varies widely among countries at
the same per capita income. What matters is the distribution of income and household-level
living standards, not national averages.

Why We Still Study the Malthusian Trap

1. It remains a live debate: many non-economists still invoke it, so understanding its limits is
essential.
2. Historical relevance: Malthusian dynamics arguably prevailed from the agricultural
revolution to the industrial revolution.
3. It highlights the essential role of technological progress in modern growth.
4. It underlines the importance of factors that prevent its re-emergence: agricultural
productivity, women's empowerment, social security, and education.

6.4.3 The Microeconomic Household Theory of Fertility

The dominant modern framework treats fertility as a rational economic choice. Children are treated as a
special kind of consumption/investment good. The demand for children is expressed as:
Cd = f(Y, Pc, Px, tx)

Variable What It Represents Effect on Demand for Children

Y (Household Level of family income Positive — higher income → more
Income) children demanded (if children are
normal goods)
Pc (Net Price of Anticipated cost minus benefits Negative — higher cost → fewer
Children) (opportunity cost of mother's time children demanded
minus child labour + old-age
support)
Px (Price of Other Relative prices of alternative Positive — higher price of other goods
Goods) consumption → more children relatively attractive
tx (Tastes) Strength of preference for goods vs. Negative — stronger preference for
children goods → fewer children
Table: Variables in the Microeconomic Theory of Fertility (Equation 6.1)
The key policy implication: increasing the price (cost) of children — through expanded female
employment opportunities, education, or social security for old age — leads families to demand fewer
children, often substituting quality for quantity.

6.4.4 The Demand for Children in Developing Countries

In low-income developing countries, children are valued both as consumption goods (psychological,
cultural) and investment goods (child labour on farms, old-age security). A critical distinction is that the
first 2–3 children tend to be 'consumer goods' with inelastic demand; it is the additional (marginal)
children that are treated as investments and whose demand responds to economic incentives.

Son Preference
Son preference — particularly strong in South Asia and East Asia — has three main economic
explanations:
• Old-age security: daughters traditionally move to husband's household and care for in-laws.
• Earnings potential: sons typically have higher lifetime earnings; more capable of financial
support.
• Dowry costs: in South Asia especially, daughters involve large dowry payments, raising their
cost substantially.
Son preference contributes to higher overall fertility (families 'try again' for a boy), sex-selective
abortion, and even female infanticide. It harms girls through lower investment in their education and
health. The self-sustaining nature of son preference as a social norm makes it resistant to change.

6.4.5 Implications for Development and Fertility

Social and economic progress lowers fertility most effectively when its benefits are broadly shared —
especially among the poor. The following six socioeconomic changes are most likely to reduce birth
rates among the poor:
• Increased education of women, improving their role and status.
• Increased female wage employment outside agriculture, raising the opportunity cost of child-
rearing.
• Rising family incomes — through employment, earnings, or redistribution.
• Reduced infant mortality through public health and nutrition programmes.
• Development of old-age social security systems outside the extended family.
• Expanded schooling so parents can substitute child quality for quantity.

Bottom Line: Development as the Best Contraceptive

The microeconomic household model and empirical evidence converge on a consistent
finding: women's education, female employment, and reductions in infant mortality are the
most powerful drivers of fertility decline.
Family-planning programmes are most effective when motivation (driven by development)
already exists — they provide the technology, not the motive.
6.5 The Consequences of High Fertility: Conflicting
Perspectives
Development economists have debated the seriousness of rapid population growth for decades.
Neither extreme — treating it as the sole cause of underdevelopment, or dismissing it entirely — is
defensible. There are three broad positions:

6.5.1 'It Is Not a Real Problem'

• Underdevelopment argument: Fix development and population takes care of itself. Family size
will fall once poverty is eliminated and social security exists.
• Resource depletion argument: Rich countries (< 25% of population) consume ~80% of world
resources. Focus on over-consumption in the North, not population in the South.
• Population distribution argument: The issue is spatial mismatch, not aggregate numbers. Some
regions (parts of Africa, Brazil) are underpopulated relative to available land.
• Women's subordination argument: High fertility is the natural outcome of women's lack of
economic opportunity and social power. Empower women, and fertility falls.

6.5.2 'It Is a Deliberately Contrived False Issue'

A neo-Marxist / neocolonial view: rich nations promote population control in poor nations to maintain an
international status quo favourable to themselves — especially given that high fertility in the South may
one day pose a challenge to the global order. Historical double standard: rich nations experienced
significant population growth during their own development phases.

6.5.3 'Population Growth Is Desirable'

Population 'revisionist' (neoclassical) view: larger populations provide economies of scale, lower
production costs, and a larger labour supply. Free markets and human ingenuity (Julian Simon's
'ultimate resource') will solve any scarcity. Neo-Marxist pronatalists in the South argue many regions
are underpopulated relative to available arable land (Africa has cultivated only 12% of its arable
potential).

6.5.4 'It Is a Real Problem'

Theoretical: The Population-Poverty Cycle
KEY TERM DEFINITION
Population-Poverty A self-reinforcing cycle where poverty leads to large family sizes (for
Cycle economic security), and large families lead to slower growth, higher
dependency burdens, lower savings, and perpetuated poverty.

The Neoclassical Growth Equation (Equation 6.2)

y - l = a(k - l) + t
Where: y = GNI growth rate; l = labour force (population) growth; k = capital stock growth; a = capital
elasticity of output; t = technological progress (Solow residual).
Implication: The higher the rate of population growth (l), the faster capital must grow just to maintain
constant per capita income. If high population also reduces savings (higher dependency burden →
lower k), the negative impact is even larger — creating a vicious circle.

Seven Empirical Negative Consequences of Population Growth

Area Consequence
Economic Growth Lowers per capita income growth, especially in countries already poor and
dependent on agriculture with land pressure.
Poverty & Inequality Negative consequences fall hardest on the poor (landlessness, cuts in
health/education, environmental damage). Large families perpetuate and
deepen poverty.
Education Large families and low incomes restrict parental investment in education.
Nationally, educational spending is spread more thinly — reducing quality.
Health High fertility increases health risks for mothers and children. Closely-spaced
births reduce birth weight and raise child mortality.
Food Population growth is a large fraction of developing-country food requirements.
New technologies must be adopted faster; marginal lands come under
cultivation.
Environment Deforestation, soil erosion, water depletion, air pollution, and urban congestion
are all exacerbated by rapid population growth.
International Excess job seekers relative to jobs fuels migration, imposing costs on both
Migration sending and receiving countries.

6.5.5 Toward a Consensus (Robert Cassen)

Three balanced propositions define the mainstream consensus position:
• 1. Population growth is NOT the primary cause of underdevelopment — the root is in poverty
and failed development policy. But...
• 2. The question is not just numbers but quality of life — and developing-country population must
be viewed in relation to global resource use by rich countries.
• 3. Rapid population growth DOES intensify underdevelopment — it is a multiplier, not the root
cause.

Three Policy Goals (Consensus Position)

1. Address underlying socioeconomic causes of underdevelopment — poverty, inequality,
female education, unemployment, malnutrition — as the primary motivation for smaller
families.
2. Establish family-planning programmes that provide the technology (contraception) to
those who are already motivated to limit family size.
3. Developed countries must also reform — reducing excessive consumption of world
resources, expanding development assistance, and liberalising immigration.
6.6 Policy Approaches
6.6.1 What Developing Countries Can Do
The primary long-run strategy is development itself — eliminating poverty, reducing inequality,
expanding education (especially for women), creating jobs, improving public health, and providing
social security. Five more specific short-run policies are:
Policy Description
1. Media & Education Use formal schooling and adult education to persuade people toward
smaller families.
2. Family Planning Provide publicly funded health and contraceptive services. Most developing
Programmes countries now have these, though unmet demand remains very high
(especially in sub-Saharan Africa, South Asia, and western Asia).
3. Economic Eliminate/reduce maternity benefits; impose financial penalties for large
Incentives / families; create old-age social security; subsidise smaller families.
Disincentives Singapore, India, Bangladesh, South Korea, and China are prominent
examples.
4. Coercion State legislation and penalties. Politically unacceptable and morally
(Cautionary Policy) repugnant in most cases. India's forced-sterilisation programme contributed
to Indira Gandhi's 1977 election defeat.
5. Women's The most crucial ingredient. Increasing female education and non-
Empowerment agricultural job opportunities raises the opportunity cost of childbearing,
reduces dependency on children for old-age security, and strengthens
women's household bargaining power.

6.6.2 What Developed Countries Can Do

The US (4.5% of world population) accounts for nearly one-fifth of annual global energy use. Developed
countries must also reform — reducing excessive consumption of non-renewable resources, cutting
unnecessary carbon emissions, and accepting responsibility for global resource inequity. A further
positive policy: liberalise immigration from developing countries. The UN estimated that legal barriers to
migration from developing to developed countries cost developing nations at least $250 billion per year.

6.6.3 How Developed Countries Can Help Developing Countries

Key areas of support beyond family planning financing:
• Expanded financial assistance and improved trade relations (tariff-free market access,
technology transfer).
• Support for indigenous scientific research capacity in developing countries.
• R&D into improved, low-cost contraceptive technology (especially effective barrier methods
given the AIDS crisis).
• Ensuring resources are not wasted on family-planning programmes where motivation for smaller
families does not yet exist — these resources may be better spent on poverty reduction.
6.6.4 Policy for Countries Facing Population Decline Before Getting Rich
By 2019, over half the world's population lived in below-replacement-fertility countries. A new
challenge: 'getting old before getting rich.' Countries like China, and many post-Soviet and middle-
income nations, face high old-age dependency burdens before reaching high income. Five policy
responses:
• 1. Allow immigration (preferably with a path to citizenship) — politically difficult but economically
most effective.
• 2. Provide generous retraining programmes so workers can remain productive as the economy
modernises.
• 3. Move up the value chain — increase productivity of the domestic economy so output per
worker compensates for fewer workers.
• 4. Create conditions to attract foreign direct investment that raises worker productivity.
• 5. Pro-natal incentives (income tax breaks, subsidised childcare) — introduce distortions and
are expensive, but quality early childhood education has the dual benefit of pro-natal effect and
human development.

Case Study 6: Burundi and Rwanda — 'Twins Growing Apart'

Burundi and Rwanda are nearly identical in geography, land area (~27,000 km²), population (~11–12
million each), ethnic composition (~84% Hutu, 15% Tutsi), and colonial history (German then Belgian).
Both suffered horrific genocidal violence. Yet their development trajectories have diverged dramatically.

Indicator Burundi Rwanda

HDI (2018) 0.417 (#185) 0.524 (#158)
Income per capita $280 ($730 PPP) $720 ($2,000 PPP)
Poverty headcount 74.7% 38.1%
Population growth (2000– 3.1% per year 2.5% per year
17)
Crude birth rate 42 per 1,000 30 per 1,000
TFR (2016) 5.7 births/woman 3.9 births/woman
Modern contraception use Low / slowly rising 17% (2005) → 52% (2010)
Life expectancy 53 years 63 years
Health spending (% budget) 8% 24%
Table 6.3 — Comparative Data: Burundi and Rwanda

Rwanda's divergence has been attributed to state-led development strategy (referred to as a

'developmental state' similar to South Korea), aggressive and politically-led population policy, female
property rights, and high legislative female representation. Rwanda declared family planning a 'national
priority' under President Kagame; contraceptive services are free in public facilities. The country's
fertility decline is extraordinary: from 8.2 births/woman in 1960 (highest in the world) to 3.9 by 2016.
Research by Muhoza et al. using Blinder-Oaxaca decomposition found that exposure to family planning
messages and husband-wife divergence in desired family size were key drivers — and that uptake was
concentrated among lower-income, rural, and less-educated populations, suggesting the programme
successfully penetrated its most important target group.

Key Lesson from Burundi & Rwanda

Family planning works best when embedded in a broader development strategy: economic
growth, improved health systems, women's empowerment, and clear political commitment.
Progress IS possible even in conflict-affected contexts (Burundi has seen some fertility
decline even amid negligible economic growth) — but sustained development accelerates it
dramatically.
Population policy divergence, compounded by exponential growth, means that the long-term
population size gap between the two countries will be far larger than current data suggest.

Complete Glossary of Key Terms

KEY TERM DEFINITION
Crude Birth Rate Number of live births per 1,000 population per year.
Death Rate Number of deaths per 1,000 population per year.
Demographic Dividend High economic growth achievable during the demographic transition
when the working-age population share greatly exceeds the non-
working-age share.
Demographic The shift from Stage 1 (high birth/death rates) through Stage 2 (falling
Transition deaths, high births) to Stage 3 (low birth/death rates, stable
population).
Doubling Time The period it takes for a population (or other quantity) to double in
size. Approximated by dividing 70 by the annual percentage growth
rate.
Family-Planning Public programmes providing education and contraceptive services to
Programmes help parents plan and regulate family size.
Hidden Momentum of The tendency of population to continue growing for decades after birth
Population Growth rates fall, because large young cohorts produce more births even at
lower per-woman rates.
Life Expectancy at Birth Expected years of life for a newborn given prevailing mortality
conditions at birth.
Malthusian Population The stable low-level equilibrium where population growth prevents per
Trap capita income from rising above subsistence, as postulated by
Malthus (1798).
Microeconomic Theory The neoclassical framework treating family formation decisions as
of Fertility rational responses to costs, benefits, income, and tastes — with
children as a special type of consumption/investment good.
Natural Increase Excess of births over deaths (i.e., fertility rate minus mortality rate).
Net International Excess of persons migrating into a country over those emigrating from
Migration it.
Population-Poverty The self-reinforcing cycle where poverty leads to high fertility (for
Cycle economic security) and high fertility reinforces poverty through
dependency burdens and lower savings.
Population Pyramid Graphic depiction of age structure with age cohorts on the vertical axis
and male/female population shares or numbers on the horizontal axis.
Rate of Population The net percentage yearly increase or decrease in population from
Increase natural increase and net migration.
Replacement Fertility The TFR at which population exactly replaces itself — approximately
2.05–2.1 in developed countries.
Reproductive Choice The principle that women should be able to determine, on equal terms
with their husbands, how many children they want and what methods
to use.
Total Fertility Rate The average number of children a woman would bear if she survived
(TFR) through all childbearing years at prevailing age-specific fertility rates.
Under-5 Mortality Rate Deaths among children aged 0–5 per 1,000 live births.
Youth Dependency Proportion of young people under age 15 to the working-age
Ratio population (15–64).

Exam Tips & Likely Questions

Most Likely Exam Questions
1. Explain the demographic transition. At what stage are most developing countries? What
determines when they move to Stage 3?
2. What is the Malthusian population trap? Draw the diagram. What are its two main
criticisms?
3. Explain the microeconomic theory of fertility. What variables determine the demand for
children? What policies can raise the 'price' of children?
4. 'Population growth is the main obstacle to development.' Critically evaluate.
5. What is the hidden momentum of population growth? Why does it matter for policy?
6. Compare and contrast any two developing countries in terms of population policy and
outcomes. (Rwanda/Burundi is ideal.)
7. What can developing countries do to reduce fertility rates? Which approach is most
evidence-based?
8. What is the demographic dividend? Which countries have benefited, and what determines
whether a country seizes or misses this opportunity?

Key Numbers and Benchmarks to Remember

World population 2019: ~7.7 billion | Projected 2050: 9.8 billion | 2100: 11.2 billion
Africa's growth rate: 2.3% per year (highest globally). Global: ~1.2%.
Replacement fertility in developed countries: ~2.05–2.1 births/woman.
Niger (2017): 7.2 TFR — among the world's highest. South Korea (2017): 1.1 — among the
lowest.
Bangladesh TFR: 7 (1970) → 2.1 (2017) — a dramatic case of rapid fertility decline.
China's one-child policy (1980–2016): ~250 million fewer births estimated.
Rwanda contraceptive prevalence: 17% (2005) → 52% (2010) — extraordinary 5-year
increase.
UN estimate: legal barriers to migration cost developing countries at least $250 billion/year.