Aiding Development

As couples have fewer children, population growth slows, providing a demographic bonus that countries can invest in better education, health care, job creation, and other improvements.

(1)

Slowing Population Growth

Slowing population growth aids development. Development requires making investments today to raise living standards tomorrow. But it is difficult to make such investments when resources are already fully used trying to keep up with the current needs of rapidly growing populations. When population growth slows, developing countries are better able to invest more per capita in education, health care, sanitation, and other productive improvements (32).

Development itself also contributes to slower population growth by leading couples to desire fewer children. Development by itself, however, can do little to reduce fertility levels and slow population growth. Family planning information and services also must be widely available and accessible so that couples can achieve their fertility desires (124).

Rapid population growth, unemployment, and lack of savings and investment are part of a cycle of poverty that trouble many developing countries. This cycle could be broken if governments at the same time emphasized providing family planning and stimulating economic growth (11).

In some countries living standards have improved after population growth slowed substantially (196). “Even in adverse circumstances–low incomes, limited education, and few opportunities for women–family planning programs have meant slower population growth and improved family welfare,” the World Bank has noted (34).

Population and economic growth. In theory, population growth might provide an economic advantage because more people could be working, produce more, and thus raise national income levels (186, 210). In reality, studies in many countries find that rapid population growth has resulted in more poverty for most people (37).

In fact, the regions of the world where fertility and population growth rates are the highest rank lowest on the United Nations Human Development Index (239) (see Figure, opposite).

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When population growth is rapid, economies often cannot create enough jobs to go around. In developing countries 800 million people are unemployed or underemployed–more than the entire workforce of the industrialized world. These high-fertility countries must create 40 million new jobs each year just to keep even (44).

A study of 99 countries in 1994 found that population growth had little impact on growth of per capita output during the 1960s and 1970s. It had a strong negative impact in the 1980s, however (118). Rapid population growth may have become more difficult to accommodate at a time of world recession and net outflows of resources from developing countries to industrialized countries (244).

Other research has found that rapid population growth dampens economic growth. Gross domestic product (GDP)–the market value of all goods and services produced in a given time period–is a measure of the economic strength of a country. A study of GDP trends and population growth in 72 countries during 1968-74 and 1977-83 found that higher population growth slowed GDP growth in the short term (15). Another study of 82 countries found that in the 1980s average income per person grew 2.5% more per year in the 41 countries with the slowest population growth than in the 41 countries with the fastest population growth (244).

When population growth slows, income per capita typically rises. For example, a study of 107 countries found that between 1960 and 1985 fertility declines consistently were followed by growth in per capita income (30). This boost in productivity and income results largely from a “demographic bonus”–a change in the age structure of the population (33, 144). As population growth slows, there is a decline in the dependency ratio–the number of dependents relative to the number of working-age people.

Greater productivity typically generates higher earnings, more savings, and more investment per capita, which in turn can help support education, health care, and other social improvements that boost productivity further. This dynamic process has been identified as one of the key reasons that the economies of many Asian countries grew rapidly between 1960 and 1990 (144).

Countries with rapid population growth often have high unemployment and low savings levels (1). Parents cannot afford to save, nor do they need to save because they rely on their children and extended family to help in emergencies, illness, and old age. As parents have fewer dependent children, their ability and their motivation to save increase (144).

A higher savings rate leads to greater domestic investment and capital deepening–that is, an increase in the amount of capital relative to the number of workers in an economy (144). In contrast, when rates of savings and investment are low, economic growth can slow, or even decline, leading to stagnant or falling living standards. In sub-Saharan Africa, as domestic savings declined from 27% of GDP in 1980 to 15% in 1993, domestic investment dropped from 24% of GDP to 16% (1).

Population growth and education. Countries with rapid population growth tend to spend less per child on education than those with slow population growth (152). In turn, declining education levels often lead to declines in productivity and to lower incomes (105).

In contrast, when fertility declines, school systems are able to educate a higher percentage of young people (41,144). As the educational level of the workforce rises, labor productivity often rises. An increase of one year in the average education of the labor force is associated with an increase of GDP of between 4% and 9% (237).

(2)

Toward Sustainable Development

Especially in countries where the population is growing rapidly, slowing this growth would go far to relieve pressures both on the economy and on the natural environment (33, 241). Populations cannot continue to grow and consumption levels to rise indefinitely without the likelihood of some day despoiling the natural environment on which present and future generations depend.

Instead, the concept of sustainable development recognizes that the process of social and economic development can continue without sacrificing the environment. The effort requires a combination of wise public investment, effective natural resource management, cleaner agricultural and industrial technologies, less pollution, and slower population growth.

Better resource management protects the environment and preserves nature’s productive capacity. Stronger economies can afford to invest more in protecting the environment. Slower population growth can speed economic growth and preserve natural resources.

Increasingly, development experts and environmentalists agree that efforts to improve living standards and protect the environment can be complementary (261, 269). In fact, reducing poverty, protecting the environment, and slowing population growth are closely linked (151, 259).

Measuring Development

Developing

Country Country

Data Average

Gross Domestic Product

per Capita in 1997 (in US$) 908

Human Development

Index 1997(*) .637

(*) Based on three dimensions of human development: life expectancy, educational attainment, and per capita income, with 1.000 being the highest possible score.

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