We discussed 'population pessimists' and 'population optimists'. I wondered which of the two categories I belong to.
Pessimists:
According to Thomas Malthus, due to 'diminishing returns', population growth would initially lead to increases in productivity that would be unsustainable long term with persistent growth. Hence what was described as the 'Malthusian trap' resulting from a fixed factor in the then subsistence economies- land and a resulting large population with increased need for food etc.
The main problem with the Malthusian story is that it doesn't account for technological progress.
Optimists:
They emphasize the positive outcomes of population growth; specifically:
- It provides greater consumer demand: This leads to innovation and technological growth as well as enabling countries to capture economies of scale this lower production costs.
- Population growth can lead to an increase in human capital
In spite the existing disagreements, there doesn't seem to be a positive effect of total population growth on the economy. Heady and Hodge(2009) showed that there was a relationship with the age distribution. East Asia exhibited this clearly in what was called the 'East Asia miracle'(Bloom et al)
'East Asia Miracle':
It began with a decrease in mortality rates(especially in the younger population) and resulting increase in life expectancy. This was mainly due to the post war availability of antibiotics, measures implemented to eradicate diseases such as Malaria(DDT spraying), improved water& sanitation as well as health service provision. This decrease initially led to a population increase. The decreases in infant mortality rates has a long term effect of decreasing fertility rates as parents begin to anticipate child survival. The further decrease in fertility rates is due to contraception availability and usage.
This initial large number of dependant teenagers developed into a large work force population. At this stage, the workforce population was much larger than the dependant population(children and elderly)/ They were able to take advantage of this demographic because the East Asian countries had social, economic and political institutions in place. It led to:
1. Increased investment: larger demand for goods and services
2. Savings: Increased by about 14%
3. Labour: This was shifted from less productive agriculture to more economically rewarding areas such as industry, technology.
I am a 'population pessimist' because I have witnessed first hand the'adverse effects' of rapid population growth as its leads to abuse of resources: overcrowding in schools, hospitals(this even increases spread of communicable diseases); inadequate food and minimal capital left over for investment. I am however convinced that a large work force population with respect to the dependant population can further economic development if the governments have support policies and institutions. It must be noted though that this 'young work force population' will progress into an elderly cohort and if fertility and death rates continue to decline, the dependant population will eventually be larger than the workforce population. However, the situation will not be dire if the elderly would have set aside savings.
I think that one challenge that my country is facing is that the HIV/AIDS scourge mainly affected the work force population thus increasing the dependency ratios.(many children were left orphaned- about 1,100,000 under 7 in 2011).
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