Key concepts
Total fertility rate: the average number of children a woman can have assuming that current age-specific birthrates remain constant throughout her child-bearing years – that is, 15- 49 years of age;
Population growth rate: The rate of population increase is measured quantitatively as a percentage yearly net relative increase (or decrease) in population size due to natural increase and net migration.
Natural increase in population measures the excess of births over deaths (that is the difference between fertility and mortality per annum.
Youth dependency ratio: The proportion of youths (under age 15) to economically active adults (ages 15 to 64).
Birth rate: Number of live births per 1000 population in a year.
Death rate: Number of deaths per 1000 population in a year.
See Todaro, M.P., and Smith, S.C., Economic Development. Several editions.
Demographic transition & demographic dividend
Demographic transition refers to the process by which fertility rates eventually ecline to replacement levels.
Demographic transition has three stages that almost all contemporary developed nations’ population went through to current levels. See Todaro, M.P., and Smith, S.C., (2003:272). Economic Development. 8/E. Pearson Education.
Demographic transition stages
‘Demographic dividend’
- ‘Demographic dividend’ is defined as a rise in the rate of economic growth as a result of a rising share of working age people in a population. It occurs when there is a falling birth rate and the consequent shift in the age structure of the population towards adult working ages.
- It is commonly viewed as a demographic gift or bonus and demographic window. Bloom & Canning (2000:1207) describe the it as “the transition from high to low rates of mortality and fertility has been dramatic and rapid in many developing countries in recent decades”.
- Mortality declines concentrated among infants and children typically initiate the transition and trigger subsequent declines in fertility. An initial surge in the numbers of young dependents gradually gives way to an increase in the proportion of the population that is of working age
- The right demographic dividend is a ‘quality’ population. One that is educated and skilled; and healthy. Health population will work hard because they know that living long requires for more savings (postponed current consumption). According to Bloom and Canning (2000), better health results in greater income in future.
- With regard to productivity, healthier populations tend to have higher labour productivity, because their workers are physically more energetic and mentally more robust (Bloom and Canning 2000:1207).
- Health is an important form of human capital. It can enhance workers’ productivity by increasing their physical capacities, such as strength and endurance, as well as their mental capacities, such as cognitive functioning and reasoning ability (Bloom and Canning 2005:2).
See Bloom, E,D., and Canning, D., ( 2005), “Health and Economic Growth: Reconciling the Micro and Macro Evidence”, CDDRL Working Papers, Number 42,Center on Democracy, Development, and The Rule of Law Stanford Institute on InternationalStudies; Bloom, E, D, and Canning, D., (2000), “The Health and Wealth of Nations”, Science Vol.2 87 18 February 2000
Theories and Model of Population Growth
The Malthusian Population Trap
- Thomas Malthus (1766-1834) – writing in 1798 in his Essay on the Principle of Population – feared that man’s capacity to produce children was higher than his capacity provide for them.
- He postulated a universal tendency for the population of a country, unless checked by dwindling food supplies, to grow at geometric rate, doubling every 30 to 40 years; while land and food supplies could only expand at an arithmetic rate.
- Due to the diminishing returns, to a fixed factor, land and food supplies are expected to expand at an arithmetic rate. We should not also that using mainly menial labour, there comes a time when a human being loses the capability to the till the land to provide food for his big family.
- Because the growth in food supplies cannot keep pace with the expanding population, per capita food production will have a tendency to fall so low beyond the subsistence level. This would result in absolute poverty for the family which fails to subsist.
- According to Malthus, the only way to avoid this situation of chronic low levels of living was that people should engage in ‘moral restraint’ and limit the number of the children they produce. This is to say that there was need for family planning.
- Malthus looked at what he called preventive and negative checks: To rise above subsistence levels of per capita income (which is can be defined as per capita food production in agrarian society), poor nations or poor families should initiate preventive checks (such as birth control) of the population. If preventive checks are not done, negative checks (starvation, diseases, wars) will inevitably happen as a restraining force on population expansion.
Criticism of the Malthusian model
- It has failed empirical verification.
- It ignores the impact of technology in influencing the growth inhibiting factors of rapid population growth. E.g., technology has been able to raise the quality or productivity of the same quantity available land. We can increase quantity produced per hectare and improved quality of the produce using fertilizers, improved seeds, good post-harvest handling practices, etc.
- Malthus also assumes a direct and positive relationship between country’s population increase and the level of national per capita income. Based on research in LDCs, it has been found that there is no clear correlation between population growth rates and the level of per capita income.
- The theory should have used the family’s decision on the number of children. It the decisions of the family (husband and wife) on the number of children they need – subject to the budget constraint – that ultimately influences family sizes and the total national population. Except in China, with One-Child Policy, which was so radical, the government rarely determines the numbers of children a family will have.
Labour Force
We should note at the outset that not every person of the working-age in the population of any given country is in the labour market – or looking for jobs.
- Some will be taking full-time educational courses, some will be sick or simply not wanting a job (e.g., remaining at home raising children or caring for their relatives), and others will be institutionalized (such as those in jail).
The remaining part of the working –age group – those willing and able to work – make up what we refer to as the labour force.
- The labour force is composed of those who have a job – the employed – and those who are able and willing to work but currently don’t have a job – the unemployed.
The employment rate refers to the percentage (or proportion) of the labour force that is actually current having a job.
- Unemployment rate is the percentage of the labour force without a job.
Causes of unemployment in less developed Countries
- Few industries
- Poor skills to march required jobs in industries and services
- Agriculture not attractive to the youth
- Poor agricultural productivity
- Cost of capital discouraging entrepreneurs from investment
- Corruption, nepotism and other forms of job discrimination
- FDI bringing in staff from their home countries
- Wars and conflicts
- Poor family size
