The Effects of Population Growth on Economic Development


Population growth is closely tied to economic development. On the one hand, labor shortages will slow the rate of economic growth in industrialized countries, but on the other hand, a high birthrate in a developing country may stress limited renewable resources. Governments in western and other industrialized countries like Japan are challenged to create effective immigration policies and programs to increase the birthrate, while countries with weaker economies pursue public health policies to reduce population growth. Globally, a smaller population presents multiple benefits from an ecological perspective, but some economies are challenged by low birthrates and are redirecting their need for unskilled labor to countries with higher populations and lower wage demands.

Thomas Malthus

  • British economist Thomas Malthus (1766-1834) sounded the first modern warning of the potentially negative impact of population growth on economic development. He argued that populations will always tend to increase past the natural levels of the food supply, and therefore public policy should encourage what he called "moral restraint" to limit the birthrate. Otherwise, argued Malthus, the per capita Gross Domestic Product (GDP), which is the measure of wealth per individual, will inevitably decline.

Industrialized Nations

  • Industrialized nations such as the United States and European countries, however, need a steady supply of cheap, unskilled labor to staff manufacturing plants and fill menial service positions. The availability of this employment during the 20th century led to a large-scale migration from rural to urban areas, as well as increased immigration, legal and illegal. Debate continues on the value of these population movements, with the increased productivity of the nation possibly offset by depressed wages. Lower labor costs in high-birthrate Third World countries are attractive to manufacturing industries that are increasingly redistributing unskilled jobs.

The Developing World

  • Developing countries experience the negative impact of rapid, uncontrolled population growth, often requiring western countries to provide direct aid to avert famine. Poor social conditions, including regional warfare and weak governance, often make conditions worse when scarce resources are not sufficient to meet the needs of a rapidly growing population. These conditions exacerbate poverty, malnutrition, childhood and maternal mortality, use of child labor and already inadequate educational opportunities, especially for women.

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