Chapter 6: Population Growth and Economic The Demographic Transition

Development
– process by which fertility rates
Structure of the World’s Population eventually decline to replacement levels.

1. Geographic Region – world population STAGE 1 STAGE 2 STAGE 3

distribution is put into dramatic perspective Stable or Modernization Modernization
by the map. It shows the uneven distribution very slow- led to a and
of population. growing marked development
populations reduction I caused the
as a result mortality but beginning of a
2. Fertility and Mortality Trends – the rate of of a not decline in
population increase is quantitatively combination immediately fertility;
measured as the percentage yearly net of high rates accompanied eventually,
relative increase (or decrease, in which case and almost by decline in falling birth
it is negative) in population size due to equally high fertility. rates
death rates converged
natural increase and net international
with lower
migration. death rates,
leaving little
Natural Increase – excess of births(fertility) or no
over deaths(mortality). population
Net International Migration – excess of growth.
persons migrating into a country over those Marks the
beginning of
who emigrate from that country.
the
demographic
3. Age Structure and Dependency Burdens transition
DEVELOPING DEVELOPED
COUNTRIES COUNTRIES
Youthful Relatively low The Causes of High Fertility in Developing
Youth dependency Old-age dependent Countries
– U15 are high
Adults – 15 to 64 1. Malthusian Population Trap
- Reverend Thomas Malthus(Father of the
Modern Birth Control Movement)
Hidden Momentum of Population Growth
- population increase was bound to stop
• Population growth has a built-in because life-sustaining resources, which
tendency to continue, tends to keep increase at an arithmetic rate, would be
going for some time before coming to a insufficient to support human population,
stop. which increases at a geometric rate.
• Persist for decades after birth rates Criticisms
drop.
a. ignores the enormous impact of
Reasons: technological progress in offsetting the
1. High birth rates cannot be altered growth-inhibiting forces of rapid
substantially overnight. population increases.
2. Age structure of many developing b. Focuses on its assumption that national
countries’ population. rates of population increase are directly
 (positively) related to the level of Demand for Children in Developing
national per capita income. Countries
c. It is the level of household income, of
the level of per capita income, that • Household demand for children is
seems to matter most. determined by family preferences for a
certain number of surviving (usually
2. Microeconomic Household Theory of male) children (i.e., in regions of high
Fertility mortality, parents may produce more
- family formation has costs and benefits children than they actually desire in the
that determine the size of families expectation that some will not survive),
formed. by the price or “opportunity cost” of
- Children are considered as investments rearing these children, and by levels of
goods particularly in low income family income.
countries so that fertility becomes a • First two or three as “consumer goods”;
rational economic response to the additional children as “investment
consumer’s (family) demand for children goods”
relative to other goods. • Private Benefits: farm work and old
• The higher the household income, the age financial support
greater the demand for children. • Private Costs: opportunity cost of the
(direct relationship between desired mother’s time and the cost of educating
number of children and the household children.
income) • It follows that one way to induce families
• The higher the net price of children, the to desire fewer children is to raise the
lower the quantity demanded. price of child rearing by, say, providing
(inverse relationship between the greater educational opportunities and a
desired number of children and the net wider range of higher-paying jobs for
price of children) young women.
• The higher the prices of all other goods Some Empirical Evidence
relative to children, the greater the
quantity of children demanded. - as women become better educated,
(direct relationship between the desired they tend to earn a larger share of
number of children and the prices of household income and to produce fewer
goods relative to children) children.
• The greater the strength of tastes for - There is a strong association between
goods relative to children, the fewer decline in child mortality and the
children demanded. subsequent in fertility.
(inverse relationship between the - The importance of educating women
desired number of children and the and improving public health and child
strength taste for goods relative to nutrition programs in reducing fertility
children) levels.
Implications for Development and Consequences of High Fertility: Some
Fertility Conflicting Perspectives

1. An increase in the education of 1. Rapid population growth is NOT A REAL

women and a consequent change in PROBLEM
their role and status.
2. An increase in female nonagricultural • The problem is not population growth but
wage employment opportunities, other issues.
which raises the price or cost of their Other Issues:
traditional child-rearing activities.
3. A rise in family income levels through1. Underdevelopment
the increased direct employment and 2. World Resource Depletion and Environmental
earnings of a husband and wife or Destruction
through the redistribution of income 3. Population Distribution
and assets from rich to poor. 4. Subordination of Women
4. A reduction in infant mortality through
expanded public health programs • Population growth is a false issue
and better nutritional status for both deliberately created by dominant rich-
mother and child and better medical country agencies and institutions to keep
care. developing countries in their dependent
5. The development of old-age and condition.
other social security systems outside - the overconcern in the rich nations with
the extended family network to the population growth of poor nations is
lessen the economic dependence of really an attempt by the former to hold
parents, especially women, on their down the development of the latter in
offspring. order to maintain an international status
6. Expanded schooling opportunities so quo that is favorable to the rich nations’
that parents can better substitute self-interests
child “quality” for large numbers of • For many developing countries and regions,
children. population growth is in fact desirable.
- To protect currently underpopulated
Expanded efforts to make jobs,
border regions against the expansionist
education, and health more broadly
intentions of neighboring nations.
available to poverty groups in general
- Many ethnic, racial, and religious groups
and women in particular will not only
in less developed countries favor large
contribute to their economic and psychic
family size for both moral and political
well-being (i.e., to their development) but
reasons.
also contribute substantially to their
- Military and political power are often seen
motivation for smaller families.
as dependent on a large and youthful
population.
2. Rapid population growth is A REAL 2. To bring about smaller families through
PROBLEM development-induced motivations, family-
planning programs providing both the
• The Extremist Argument education and the technological means to
- Regarded as the principal cause of regulate fertility for people who wish to
poverty, low levels of living, malnutrition, regulate it should be established.
ill health, environmental degradation. 3. Developed countries should help developing
Call severe ad coercive measures. countries achieve their lowered fertility and
• The Theoretical Argument mortality objectives.
- Population growth intensifies and
Some Policy Approaches
exacerbates the social, economic, and
psychological problems associated with 1. General and specific policies that developing
the condition of underdevelopment. country governments can initiate to influence
• Other Empirical Arguments and perhaps even control their population
- Economic growth growth and distribution.
- Poverty and inequality 2. General and specific policies that
- Education developed-country governments can initiate
- Health in their own countries to lessen their
- Food disproportionate consumption of limited
- Environment world resources and promote a more
- International migration equitable distribution of the benefits of global
economic progress.
Goals and Objectives: Toward Consensus
3. General and specific policies that
1. Population growth is not the primary cause developed-country governments and
of low levels of living, extreme inequalities, international assistance agencies can
or the limited freedom of choice that initiate to help developing countries achieve
characterize much of the developing world. their population objectives.
2. The problem of population is not simply one
What Developing countries Can Do?
of numbers but involves the quality of life and
material well-being 1. try to persuade people to have smaller
3. Rapid population growth does serve to families through the media and the
intensify problems of underdevelopment and educational process, both formal (school
make prospects for development that much system) and informal (adult education)
more remote. 2. enhance family-planning programs to
provide health and contraceptive services to
Policy Goals and Objectives
encourage the desired behavior.
1. In countries or regions where population 3. manipulate economic incentives and
size, distribution, and growth are viewed as disincentives for having children
an existing or potential problem, the primary 4. governments can attempt to coerce people
objective of any strategy to limit further into having smaller families through the
growth must deal not only with the power of state legislation and penalties.
population variable per se but also with the 5. raise the social and economic status of
underlying social and economic conditions of women
underdevelopment.
What the Developed Countries Can Do? Chapter 7: Urbanization and Rural-Urban
Migration
1. the responsibility of rich nations to
simplify their own consumption demands • There is a positive association between
and lifestyles. urbanization and per capita income.
2. to liberalize the legal conditions for the • On average, developing countries are
international immigration of poor, urbanizing at a faster rate.
unskilled workers and their families from • Urbanization everywhere in the world,
Africa, Asia, and Latin America to North although at differing rates.
America, Europe, Japan, and Australia. • In most regions of the developing world,
because population is so much larger, the
How Developed Countries Can Help
sheer numbers of people coming into the city
Developing Countries with Their Population
is unprecedented.
Programs
• The most rapid urbanization in now
1. whole area of research into the technology occurring in Asia and Africa; well before
of fertility control, the contraceptive pill, 2030, more than half of all people in these
modern intrauterine devices (IUDs), regions will live in urban areas.
voluntary sterilization procedures, and, • More than half the world’s urban population
particularly in the age of AIDS, effective will live in Asia
barrier contraception.
2. financial assistance from developed The Role of Cities
countries for family-planning programs, Agglomeration Economies – cities are formed
public education, and national population due to the cost advantages to producers and
policy research activities in the developing consumers.
countries.
2 forms:

a. Urbanization economies – effects

associated with the general growth of a
concentrated geographic region.
b. Localization economies – effects captured
by particular sectors of the economy, such
as finance or autos, as they grow within an
area.

Industrial Districts – created when firms doing

similar works are located close to each other.

Benefits:

• opportunity to contract out work easily when

an unusually large order materializes
• for the marketing advantages of locating
where company procurers and household
consumers of their goods know to shop to
get the best selection
• location benefits (passive collective b. Differentiated Plane Model
efficiency) and collective action as an - Alfred Weber, Walter Isard, and Leon
industry (active collective efficiency) Moses
- predicts urban concentrations at the
City – an area with relatively high population points where the scarce transportation
density that contains a set of closely related routes cross, called “internal nodes.” The
activities. hierarchy of urban sizes depends on the
Industrial clusters are increasingly common in pattern of nodes and the industrial mix.
developing countries: The Urban Giantism Problem
1. Cottage industry – traditional, by village, one First-City Bias - country’s largest or “first-place”
family microenterprise, sharing of commo city receives a disproportionately large share of
specialization public investment and incentives for private
2. Advanced manufacturing techniques investment in relation to the country’s second-
There may be a role for government policy in largest city and other smaller cities.
encouraging the upgrading of clusters. Causes of Urban Giantism –
Government itself shares the blame for cluster
stagnation. urban giantism probably results from a
combination of a hub-and-spoke transportation
Efficient Urban Scale system and the location of the political capital in
The higher the urban density: the largest city.

a. High congestion cost (real estate, tall • firms wish to set up operations in the city
buildings) vertically cheaper than where the most consumers already live
horizontally • consequences of dictators’ efforts to remain
b. Longer commutes and greater in power
transportation costs and demand higher • Easy access to government officials
salaries to cover these costs. • Personal security is highest
c. Higher cost of infrastructure (water and • To get rid of corruption, civil unrest and bad
sewer system) infrastructure I the rural areas

Two well known theories of city size: The Urban Informal Sector

a. Urban Hierarchy Model (Central Place Informal Sector - small competitive individual or
Theory) family firms, petty retail trade and services,
- August Losch and Walter Christaller labor-intensive methods, free entry, and market-
- plants in various industries have a determined factor and product prices.
characteristic market radius that results
Policies for the Urban Informal Sector
from the interplay of three factors:
1. economies of scale in production, Arguments favoring:
2. transportation costs, and
3. the way the demand for land is spread 1. the informal sector generates surpluses
over space even in a hostile policy

Larger (1), lower (2), lower (3) = minimize costs

2. only a fraction of the capital needed in the population will settle close to its new area of
formal sector is required to employ a worker work, away from the urban density
in the informal sector.
3. the informal sector can play an important Women in the Informal Sector
role in the formation of human capital
4. generates demand for semiskilled and
unskilled labor
5. adopt appropriate technologies and make
use of local resources
6. plays an important role in recycling waste
materials,
7. promotion of the informal sector would
ensure an increased distribution of the
benefits of development to the poor

Disadvantages:

1. aggravate the urban unemployment problem

by attracting more labor than either the
desirable parts of the informal or the formal
sector could absorb
2. concern over the environmental
consequences
3. when regular formal-sector employment
becomes available, many informal-sector
microentrepreneurs switch sectors to take
these jobs

Measures to promote the informal sector:

1. abandon their hostility toward the informal

sector and adopt a more positive and
sympathetic posture
2. governments should facilitate training in the
areas that are most beneficial to the urban
economy
3. provision of credit would therefore permit
these enterprises to expand, produce more
profit, and hence generate more income and
employment
4. access to improved technology
5. providing infrastructure and suitable location
for work
6. promoting growth of the sector on the fringes
of urban areas or in smaller towns where the