ECON 181

Population.
WARNING: The slides are NOT lecture notes. You still need to read the assigned papers.

Econ 181: Population

October 24, 2011

Contents
1 Motivation and denitions 1.1 1.2 Why population? . . . . . . . . . . . . . . . . . . . . . Denitions . . . . . . . . . . . . . . . . . . . . . . . . . 4 5 6 9 11 25

2 A brief history of human population 3 The present demographic situation 4 The causes of population growth 4.1 4.2

Malthus, the Pessimist . . . . . . . . . . . . . . . . . 26 Modern theories . . . . . . . . . . . . . . . . . . . . . 27 29

2

5 Population and development

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5.1 5.2 5.3

Population and accumulation . . . . . . . . . . . . . . 30 Population and productivity . . . . . . . . . . . . . . . 31 Population and market failures . . . . . . . . . . . . . 32 34

6 Population policy

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Motivation and denitions

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1.1

Why population?

The production function. What are the predictions of the Solow model? Economies of scale and the size of the market. The McNamara-Wolfensohn debate. Food prices and environmental issues.

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1.2

Denitions

(Crude) Birth rate: births per thousand of population. (Crude) Death rate: deaths per thousand of population. Rate of natural increase: is the dierence between the birth rate and the death rate. Question: Is the natural rate positive or negative?

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 Doubling time: number of years it takes to double the size of the population. How to obtain that number? (see homework 1)

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 Age structures: cohorts. Infant death rate: deaths in the rst year of life per thousand live births. Life expectancy: number of additional years the average person of a given age will live if age-specic death rates are constant. Most used: life expectancy at birth. Fertility: propensity to have children. Age-specic fertility rate: average number of children born to women in a particular age group. Total fertility rate: number of children the average women will have in her lifetime if age-specic fertility rates remain constant.
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A brief history of human population

Pre-agriculture era: low population density, high birth and death rate. 100 million by the end of this era (12,000 BC). From settled agriculture to the industrial revolution: agriculture starts, more reliable food supply, lower death rates, population growth 0.5% a year. 1.7 billion by the end of this era (year 1800). From the industrial revolution to World War II: less famines (in Europe), food prices fell, better sanitation, smaller death rate. Migration out of Europe. Population around 2.5 billion in 1945.

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 The post-WWII period: death rates fell even more and major increase in life expectancy. Natural rate could be as high as 2 or 3%. Population growth is slowing down. Demographic transition: from hight birth and death rates, the lower death rates followed by low birth and death rates.

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The present demographic situation

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 Source: U.S. Census Bureau, International Population Reports WP/02, Global Population Prole: 2002, U.S. Government Printing Oce, Washington, DC, 2004. TFR sources: Sneeringer, Stacy E. 2009. Fertility Transition in Sub-Saharan Africa: A Comparative Analysis of Cohort Trends in 30 Countries. DHS Comparative Reports No. 23. Calverton, Maryland, USA: ICF Macro. Rutstein, Shea O. 2002. Fertility Levels, Trends, and Dierentials 1995-1999. DHS Comparative Reports No. 3. Calverton, Maryland: ORC Macro.

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Figure 1. Time to Successive Billions in World Population: 1800-2050

The sixth billion accrues to world population in record time!

10 9 8 7 6 5 4 3 2 1 1804 118 years 0 1800 1850 1900 1950 2000 2050 1922 37 years 1959 13 years 15 years 1974 12 years 1987 14 years 1999 15 years 2013 20 years 2028 Population in billions Total world population 2048

Source: United Nations (1995b); U.S. Census Bureau, International Programs Center, International Data Base and unpublished tables.

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Table A-3.

Population, Vital Events, and Rates by Region and Development Category: 2002
[Population and events in thousands. Figures may not add to totals because of rounding] Rate of natural increase (percent) 1.2 1.4 0.1 2.2 2.2 1.8 2.1 1.2 1.5 (Z) 0.1 (Z) (Z) 0.5 1

Region

Midyear population 6,228,394 5,029,539 1,198,856 838,720 686,522 152,199 178,574 3,517,862 538,680 803,255 392,237 120.864 290,154 319,705 31,598

Births 128,578 115,120 13,458 30,133 26,538 3,595 4,905 68,104 11,282 9,186 4096 1,296 3,794 4,432 536

Deaths 54,997 42,794 12,203 12,097 11,285 813 1,071 26,671 3,256 8,974 3,843 1,314 3,818 2,701 227

Natural increase 73,581 72,326 1,255 18,036 15,253 2,783 3,833 41,434 8,026 212 254 -18 -24 1,731 309

Births per 1,000 population 21 23 11 36 39 24 28 19 21 11 10 11 13 14 17

Deaths per 1,000 population 9 9 10 14 16 5 6 8 6 11 10 11 13 8 7

WORLD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Less Developed Countries . . . . . . . . . . . . More Developed Countries . . . . . . . . . . . . AFRICA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Sub-Saharan Africa . . . . . . . . . . . . . . . . . . North Africa . . . . . . . . . . . . . . . . . . . . . . . . . NEAR EAST . . . . . . . . . . . . . . . . . . . . . . . . . . ASIA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . LATIN AMERICA AND THE CARIBBEAN . . . . . . . . . . . . . . . . . . . . . . . . . EUROPE AND THE NEW INDEPENDENT STATES . . . . . . . . . . . . . Western Europe . . . . . . . . . . . . . . . . . . . . . Eastern Europe . . . . . . . . . . . . . . . . . . . . . . New Independent States . . . . . . . . . . . . . . NORTH AMERICA . . . . . . . . . . . . . . . . . . . . OCEANIA. . . . . . . . . . . . . . . . . . . . . . . . . . . . . EXCLUDING CHINA: World . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Less Developed Countries . . . . . . . . . . . . Asia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Less Developed Countries . . . . . . . . . . . .

4,918,062 3,720,158 2,208,482 2,081,416

111,397 97,966 50,950 49,725

46,250 34,053 17,929 16,867

65,147 63,912 33,020 32,858

23 26 23 24

9 9 8 8

1.3 1.7 1.5 1.6

Z Between -0.05 percent and +0.05 percent. Note: Reference to China encompasses China, Hong Kong S.A.R., Macau S.A.R., and Taiwan. Direct access to this table and the International Data Base is available through the Internet at www.census.gov/ipc/www. Source: U.S. Census Bureau, International Programs Center, International Data Base.

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Figure 2. Regional Distribution of Global Population: 1950, 2002, and 2050

Population rankings of major world regions continue to shift in favor of developing regions.
China Developed World* India Rest of Asia and Oceania Eastern Europe and the NIS Sub-Saharan Africa Latin America and the Caribbean Near East and North Africa

1,800 1,600 1,400 1,200 1,000 800 600 400 200 0

Population in millions

1950**

2002

2050

* "Developed World" refers to North America (excluding Latin America and the Caribbean), Western Europe, Japan, Australia, and New Zealand. Rest of Asia and Oceania refers to Asia excluding Japan, China, and India plus Oceania excluding Australia and New Zealand. NIS indicates the New Independent States of the former Soviet Union. ** Current boundaries. Source: U.S. Census Bureau, International Programs Center, International Data Base.

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Table 1. The Top Ten Most Populous Countries: 1950, 2002, and 2050*

Less developed countries dominate the list of the world's ten most populous countries
1950** 2002 2050

1. 2. 3. 4. 5. 6. 7. 8. 9. 10.

China India United States Russia Japan Indonesia Germany Brazil United Kingdom Italy

1. 2. 3. 4. 5. 6. 7. 8. 9. 10.

China India United States Indonesia Brazil Pakistan Russia Bangladesh Nigeria Japan

1. 2. 3. 4. 5. 6. 7. 8. 9. 10.

India China United States Indonesia Nigeria Bangladesh Pakistan Brazil Congo (Kinshasa) Mexico

Rankings of future or past top-ten countries

11. 13. 15. 16. 32.

Bangladesh Pakistan Nigeria Mexico Congo (Kinshasa)

11. 13. 21. 22. 23.

Mexico Germany United Kingdom Italy Congo (Kinshasa)

14. 16. 24. 29. 35.

Russia Japan Germany United Kingdom Italy

*More developed countries/less developed countries. **Current boundaries. Source: U.S. Census Bureau, International Programs Center, International Data Base and unpublished tables.

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Total fertility rates (TFR)

It is not the average number of children a woman will bear. It is a synthetic measure. TFR is the sum of the age-specic fertility rates of women in a given year. Age-specic fertility rate: number of births born to women of a specic-age (15-19, 20-24, etc.) TFR: number of children an average woman would have in her lifetime if age-specic fertility rates remained constant. Captures a current trend.

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Figure 3.1: 23 Sub-Saharan African countries: Cumulative number of births, by mother's age and birth cohort
9

Number of births

5 Cohort 1940-1949 4

Cohort 1950-1959
3 Cohort 1960-1969

Cohort 1970-1979
2

0 0 15-19 20-24 25-29

Age Group

30-34

35-39

40-44

45-49

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Fig. 3.2: 23 Sub-Saharan African countries: Age-specific fertility rates, by mother's birth cohort
2.0

1.8

Average number of births per woman in the age group

Cohort 1940-1949
1.6 Cohort 1950-1959 Cohort 1960-1969

1.4 Cohort 1970-1979 1.2

1.0

0.8

0.6

0.4

0.2

0.0

15-19

20-24

25-29

30-34 Age group

35-39

40-44

45-49

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TFR 0-3 years before survey Brazil Colombia Dominican Republic Peru Nicaragua Bolivia Haiti Guatemala Vietnam Kazakhstan Indonesia India Bangladesh Kyrgyz Republic Uzbekistan Philippines Nepal Turkey Egypt Jordan Yemen South Africa Zimbabwe Ghana Kenya Comoros Nigeria Cameroon Central African Republic Togo Cte dIvoire Mozambique Tanzania Guinea Senegal Eritrea Madagascar Zambia Benin Burkina Faso Tchad Mali Uganda Niger 8.0 -8.0 6.0 -6.0 4.0 -4.0 2.0 -2.0 Total Fertility Rate

Change in TFR between 0-3 and 4-7 years before survey

0.0 0.0

-2.0 2.0

-4.0 4.0

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Figure 9. Total Fertility Rate Relative to the Replacement Level for Each Country Across the Globe: 2002

In 2002, fertility levels were highest in the countries of Sub-Saharan Africa and the Near East, and lowest in the more developed countries.

Below replacement Less than 1 child per woman above replacement 1-2 children per woman above replacement 3 or more children per woman above replacement Not available
Source: U.S. Census Bureau, International Programs Center, International Data Base and unpublished tables.

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Figure 18. Age-Sex Structure of Global Population: 2002

The globe's population in 2002 was relatively young.

Age 80+ 75-79 70-74 65-69 60-64 55-59 50-54 45-49 40-44 35-39 30-34 25-29 20-24 15-19 10-14 5- 9 0- 4 400 300
Male Female

200

100

0 Millions

100

200

300

400

Source: U.S. Census Bureau, International Programs Center, International Data Base.

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Figure 19. Population Pyramids by Region and Selected Countries: 2002

Age 80+ 75-79 70-74 65-69 60-64 55-59 50-54 45-49 40-44 35-39 30-34 25-29 20-24 15-19 10-14 5-9 0-4 9 Age 80+ 75-79 70-74 65-69 60-64 55-59 50-54 45-49 40-44 35-39 30-34 25-29 20-24 15-19 10-14 5-9 0-4 9 8 8

Male
Sub-Saharan Africa World

Female

Age 80+ 75-79 70-74 65-69 60-64 55-59 50-54 45-49 40-44 35-39 30-34 25-29 20-24 15-19 10-14 5-9 0-4 6 7 8 9 Age 80+ 75-79 70-74 65-69 60-64 55-59 50-54 45-49 40-44 35-39 30-34 25-29 20-24 15-19 10-14 5-9 0-4 9 8

Male
Developed World World

Female

China World

India World

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Figure 19. Population Pyramids by Region and Selected Countries: 2002

9 Age 80+ 75-79 70-74 65-69 60-64 55-59 50-54 45-49 40-44 35-39 30-34 25-29 20-24 15-19 10-14 5-9 0-4 9 Age 80+ 75-79 70-74 65-69 60-64 55-59 50-54 45-49 40-44 35-39 30-34 25-29 20-24 15-19 10-14 5-9 0-4 9 8 8 8 7 6 5 4 3 2 1 0 1 2 3 4 5 6 7 8 9 Age 80+ 75-79 70-74 65-69 60-64 55-59 50-54 45-49 40-44 35-39 30-34 25-29 20-24 15-19 10-14 5-9 0-4 2 1 0 1 2 3 4 5 6 7 8 9 Age 80+ 75-79 70-74 65-69 60-64 55-59 50-54 45-49 40-44 35-39 30-34 25-29 20-24 15-19 10-14 5-9 0-4 3 2 1 0 1 2 3 4 5 6 7 8 9 9 8 9 8 9 8 7 6 5 4 3 2 1 0 1 2 3 4 5 6 7 8 9 Rest of Asia and Oceania World Latin America and the Caribbean World

Near East and North Africa World

Eastern Europe and the NIS World

Percent of total population Source: U.S. Census Bureau, International Programs Center, International Data Base.

Percent of total population

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The causes of population growth

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4.1

Malthus, the Pessimist

Population expansion is limited by food supply. If wages increase, people will marry younger and have more children but this will be temporary. Because resources are xed, population growth will lead to unemployment and a later reduction in wages. With lower wages, fertility will go back to its initial level. Famines occur when population does not adjust fast enough to the changes in wages. Question: Is Malthus missing something here?

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4.2

Modern theories

Fertility is the outcome of supply and demand forces. Supply: think of programs reducing the cost of contraceptives. Demand: children could seen as having an economic and psychic benet for parents. For example, in agriculture children are another source of labor.

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 Hypotheses: 1. Fertility should be higher when young children can earn income or contribute to household activities than when they cannot. 2. Reducing infant death should lower fertility because fewer births are needed to obtain the desired number of children. 3. A social security system for the elderly should lower fertility reducing the need for parents to depend on their children for support in their old age. 4. Increasing opportunities to women in the job market could decrease fertility. 5. Fertility may increase with family income.

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Population and development

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5.1

Population and accumulation

Coale and Hoover: With lower fertility, less investment is needed to provide a constant amount of capital per worker. Resources can be allocated away from education and health (due to fewer children) in favor of physical capital. Slower population growth would lower dependency ratio which in turn would reduce consumption and increase savings. Do you agree with this hypothesis? Think about the Solow model.

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5.2

Population and productivity

Malthus and neo-Malthusians: science and technology cannot resolve the key problems of diminishing returns. Population optimists Possibility to exploit economies of scale: returns to investment in roads and education are higher (up to a point) with more population. Population pressures could induce technological change. More people means more entrepreneurs and more creators. Do you agree?

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5.3

Population and market failures

Key issue: fertility is a decision made by rational individuals. Why then these individuals creating such a pressure on resources? Market failures: costs and benets of actions/behaviors are not fully borne by actors. So families have more children but fail to internalize the cost (their) children might have on public services (e.g., education and health). But the root cause of the problem is the slow speed of the public provision of these services not population itself.

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 Other issues: Optimal and observed demand for children and the market for contraceptives (see homework 3). Quantity-quality trade-o?

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Population policy

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Policy alternatives
Family planning programs: make contraceptive methods more available or cheaper. Reproductive health. Sterilization programs. Incentives: educating girls, bribing parents as in Indonesias program. Income, development and family planning. Can development be the best contraceptive? See homework 3.

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