Why does high population growth cause problems in countries with low economic growth Quizlet

population growth can cause a global crisis

population-poverty cycle would get worse

negative effects on economic growth, poverty & inequality, education, health, food, environment and international migration

Define economic development

Increase in the economic welfare or well being of a nation's population (not merely economic growth).

Involves but not limited to increases in GDP, education and healthcare.

Development objectives government pursue tend to be based around

1) Increases in output of essential goods and services (Real GDP increase)

2) Improving standards of education and healthcare

3) Invest in infrastructure such as roads, ports and telecommunications

4) Expanding social choice (a more tolerant society)

Characteristics of a developed economy

- Healthy, well educated population
- Highly productive workforce
- A well developed road and rail network
- Modern communications systems
- Wide variety of industries with firms of different sizes producing and selling a wide variety of goods and services
- Stable government
- Modern, efficient farms

Characteristics of a developing economy

- Little or no education and a low life expectancy
- Rail, road and communication infrastructure are poor
- Rapidly growing population
- Many people are poor
- At times a scarcity of food exists
- Few industries and very few firms producing and selling good quality goods and services
- Many people live in poor housing conditions with poor sanitation
- Poor farming methods and little equipment

Development indicators to assess how developed a country is

- GDP per Capita
- Percentage of population on less than $1 a day (absolute poverty)
- Life expectancy at birth
- Adult literacy rates
- Percentage of people with access to water and sanitation
- Ownership of consumer goods (cars, washing machines, etc)
- Percentage of population in agriculture compared to industry and services.

Reasons why some countries remain less developed than others

- Insufficient investment in education and healthcare
- Low levels of investment in infrastructure
- High population growth
- An over reliance on agriculture to provide jobs and income
- Dominated in international trade by developed nations
- Lack of capital (machinery)

Define Absolute Poverty

Household's income is less than $1 a day

OR

Household's income is insufficient to purchase the minimum bundle of goods and services need for survival

Define Relative Poverty

Household's income is insufficient to allow its member to participate in the normal social life of the country. Household income below 50% of median household income. Exists in all countries.

Reasons why incomes may be low and therefore cause relative poverty

- Lack of education
- Poor health/disability
- Lack of employment opportunities

Consequences of relative poverty

- Low living standards
- Lack of access to sufficient healthcare
- Lack of education

Reasons why a government might not have accurate knowledge regarding the level of poverty

Much services provided in developing countries is on black market thus, government is unaware (i.e. grandma babysit instead of taking to daycare). Government might UNDER estimate real GDP per Capita, thus OVER estimate level of poverty.

Often population statistics are just estimates in developing countries, thus GDP per Capita and Poverty is hard to measure

Many of really poor people in developing countries have no fixed address, thus don't appear on statistics. Government might UNDER estimate real level of poverty.

Government often intervene in their own economies to reduce absolute and relative poverty by

- Increasing the accessibility to good education for all children
- Increasing the accessibility to good healthcare for all citizens
- Measures to reduce Ue
- Progressive taxation of personal income
- Minimum wage
- Inward FDI

Overseas aid

Government and aid agencies from developed countries providing aid (food, financial, technological, loans and debt relief) to alleviate poverty in developing countries

Food Aid

Developed countries to countries expecting food shortages or famine

ADV:
Necessary when there's food shortages/famine in developing countries

DIS:
Farmers receiving food aid finds it difficult to sell output since consumers can get food for free. Some farmers will not produce anymore, decreasing nation's ability to produce food - exacerbating food shortage

Financial Aid

Developed countries to developing countries WITHOUT need for repayment

ADV:
Used to improve infrastructure e.g. ports, telecommunication thus, help country develop

DIS:
Often comes with stipulations e.g. contractor builds the port for which financial aid was provided, must come from country that lent the money. All raw materials come from lending country. Decreases the usefulness of the money.

Technological Aid

Aid in form of modern technology e.g. building modern power plants to provide electricity / advanced machinery for production.

ADV:
Improves ability of developed country to produce goods and services, thus increase GDP

DIS:
Developing countries people need to be trained to use machinery. Maintaining and repairing the machinery is very difficult for developing countries.

Loans (Aid)

Money given to developing countries by: government, IMF, World Bank

ADV:
Money borrowed can be used on projects that can help the country develop

DIS:
Money has to be repaid with interest.
Only given by IMF/World Bank if they adopt contractionary fiscal policies and this will cause a recession

Debt Relief (Aid)

Many developing countries are unable to pay back borrowed money. Unable to pay interest on debt, thus debt grows each year. Debt is sometimes written of by the lender country.

ADV:
Money used to repay debt can now be used to undertake developing projects or relieve extreme poverty

DIS:
Decreases incentive for other countries who can repay debt from doing so. Undermines process of lending money for development purposes if some countries don't repay it.

Aid Evaluation

FOR:
Aid supplements (tops up) a lack of domestic savings, helping to provide funds for development projects.
Moral/humanitarian argument - the richer the nations having a debt to their former colonies for previous wrong doing e.g. UK plundered resources from Zambia

AGAINST:
Create a "dependency culture". Limit to development. "Why bother develop when there's aids"
Donor countries regard it as part of their trade policy; tie Aid to trade deals, net value of Aid is that much lower; recipient may have to buy goods from donor at inflated prices (higher prices than if they had shopped around internationally, further increasing debt)

Standards of living in a developed country will usually be greater than those in developing countries. HOWEVER

- Ue people in developed countries will not have as high a living standard as many people in developing countries
- Usually a percentage of very wealthy people in developing countries who have control of much of the country and are as wealthy as anyone from developed countries
- Much of services provided in developing countries are not calculated in GDP figures (black market!), thus GDP per Capita figures makes developing countries standard of living look worse than it actually is

Will an increase in GDP reduce poverty in a country?
It depends upon

- Type of extra products produced (guns/bread)
- Distribution of income (who receives benefit of extra goods produced? few/many?)
- Whether extra goods was due to increase in amount of working hours (loss of leisure time) or an increase in productivity (no loss of leisure time)

Define Net inward migration

More people entering the country (immigrants) than leaving (emigrants)

Define Net outward migration

More people leaving the country (emigrants) than entering (immigrants)

Define Net migration

Difference between number of immigrants and emigrants

Over population

Too many people in a country/area for the resources of that country/area to support. GDP per head is lower than what's possible and country would benefit from a decrease in population or increase in resources.

Under population

Not enough people in a country/area relative to the resources of that country/area. GDP per head is lower that what is possible and the country would benefit from an increase in population as this would allow resources to be used to a greater extent.

Define Birth rate

Number of births per year per 1,000 of the country's population

Define Fertility rate

Number of children a woman has on average over her life time

There are a number of reasons for the differences in birth rates between countries such as:

Living standards

In developing countries where the standard of living is low, thus healthcare is poo, infant mortality is high and families must have many children to ensure a male heir survives to take care of parents in old age

There are a number of reasons for the differences in birth rates between countries such as:

Contraception

Use of contraception and abortion has dramatically decreased birth rates in developed countries.
In developing countries, low level of sex education and availability of contraception increases the likelihood of increased births.

There are a number of reasons for the differences in birth rates between countries such as:

Customs and religion

Many people, particularly from less developed countries, hold religious beliefs that don't allow them to use contraception = higher birth rate

There are a number of reasons for the differences in birth rates between countries such as:

Changes in female employment

Developing countries females are poorly educates, thus little chance of finding well paid job. No opportunity cost to having a large family (female has no worthwhile job to give up).

Countries where females are well educated, they have good jobs and thus large families comes with high opportunity costs (loss of an income). Thus, these families tend to have 1/2 children so that the female can remain employed.

There are a number of reasons for the differences in birth rates between countries such as:

Marriage

Developed countries nowadays get married later in life (30s) thus have less children.

Developing countries people get married younger thus greater chance of more children.

Why the birth rate is decreasing in many countries

- Women are marrying later thus having less children
- Education of girls is more widespread, increasing the quality and quantity of their employment and thus acting as a significant opportunity cost to a large family
- Lower infant mortality thus fewer births required to ensure male heir
- Growing knowledge and awareness of contraception
- Customs and religion promote large families are decreasing in influence

Will a fall in the birth rate benefit and economy?

YES:
It decreases dependency ratio in the short term so more adults can join the workforce as there's less children to look after.
Reduces government spending on healthcare and education; resources that can be used elsewhere

NO:
May reduce demand thus increase Ue since labour is derived demand
Average age of workforce will rise and it will become less mobile and adoptable
Reduces size of labour force in the long run, increases dependency ratio in the long run

Define death rate

Number of deaths per year per 1,000 of the country's population

Reasons for the difference in death rates between countries:

Living standards

Better quality food, clothing, sanitation and shelter have helped improve health and life expectancy in developed countries.
In developing countries life expectancy is often reduced due to lack of / poor provision of these basic necessities.
However, developed countries' obesity is an increasing problem that leads to cancer and heart diseases and reduces life expectancy

Reasons for the difference in death rates between countries:

Medical Advances and Healthcare

Advances in medicine and healthcare has reduced the number of deaths by diseases e.g. small pox and cholera in developed countries. However, these diseases still exist in some developing countries curtailing life expectancy

Reasons for the difference in death rates between countries:

Natural Disasters and Wars

Hurricanes, floods, earthquakes, droughts, war, etc. has a devastating effect on average life expectancy and affect developing countries far more than developed countries

Net migration Explanation

Every year almost 3 million people emigrate form less developed countries to developed countries. Because of this:
- Developing countries usually have net outward migration
- Developed countries usually have net inward migration

People usually migrate from less developed countries for the following reasons:
- Economic
- Social
- Political

Important characteristics of population

1) Age distribution: How many people are in different age groups
2) Sex distribution: The balance of males and females
3) Geographic distribution: Where people live
4) Occupational distribution: In what sector people work in

Age Distribution

Age Distribution:
The number of people (or percentage of people) in each age group in a population.

Ageing Population:
In countries where people are living longer, the average age of the population increases and there are more elderly people as a proportion of the population

Sex Distribution

The ratio of males to females in a population

Reasons for gender imbalances

- Wars that result in the deaths among young adult males
- Sex selection through abortion as during China's one baby policy period
- Sex specific inward migration. E.g. large numbers of males have migrated to Qatar to work in construction. This increases the male ratio.

The rate of population growth may differ between a developed and developing country

A developing country is likely to have a higher population growth rate due to a higher birth rate from a high infant mortality rate - more babies born to ensure survival of male heir.

A developed country is likely to have a lower population growth rate due to a lower birth rate from a low infant mortality rate.

Increasing GDP per Capita may lead to a reduced birth rate because

- People have money to take care themselves in old age therefore do not need many children
- Higher income = better healthcare = lower infant mortality = less need for large families to ensure male heir
- Greater availability of different types of contraception as a country becomes wealthier
- Higher income means people stay in education longer. Greater education = less children

Extent to which an ageing population is a serious economic problem

Serious because:
- An ageing population will increase healthcare needs which will use up a lot of tax revenue therefore comes with an opportunity cost
- More pensioners thus increased costs of paying more pensions
- Increased dependency ratio (growing proportion of non workers to workers)

Not serious because:
- Older workers are more experienced and this leads to greater productivity
- An ageing population may not increase the pension payment burden if the retirement age is raised
- If the average age is rising it means that there are proportionally less young people (under 18) and therefore less dependents from this age category

Countries with a high population growth rate may have a lower average income because

- If the population size is rising faster than GDP then GDP per Capita will fall
- An increased birth rate will increase the dependency rate, which will increase the non-worker to worker ratio therefore decrease average incomes
- There may not be enough employment for the increased population therefore Ue and poverty will increase

Why the tertiary sector is more important in developed economies

a) As economies develop, wages increase and people have more income. This extra income is spent on services rather than goods, which is why the tertiary sector grows in importance in developed economies

b) Over time the prices of services have risen much faster than the price of manufactured goods. Therefore developed economies have tended to specialise in services

Why the secondary sector is less important in developed economies

As a country develops wages rise. Therefore developed countries are uncompetitive in the production of manufacturing goods compared to countries such as India, China. Therefore developed countries' manufacturing sectors declines

Why the primary sector becomes less important as an economy develops

As an economy develops, wages rise. Rising wages causes developed countries to become uncompetitive in the extraction of primary resources and therefore they have to import them. This decreases the size of the primary sector in the developed country

Problems caused by a rapidly rising population

- High population growth puts pressure on resources such as healthcare, education, etc.
- High population growth can lead to overcrowding and the creation of urban slums
- If there is a lack of job opportunities there will be a high rate of Ue

Why a rapidly rising population might not lead to problems

- The increase in population may well lead to enough increased demand to create jobs for the extra people when they come of working age
- If the young population are well educated this can lead to enormous leaps forward in terms of productivity. Moreover, the country will become very attractive to FDI

Will government policies can always reduce poverty in a developing country?

- Progressive taxation and redistribution should go some way alleviating absolute poverty in developing countries however the ability of developing countries to collect taxes in poor
- Good educational programmes should ensure that poor individuals are able to secure good jobs. However the jobs have to be available once the people are educated or else it will be a waste
- A minimum wage should increase the wage of the least well off in society however if set above equilibrium it can lead to Ue

Should a government be concerned about a fall in the country's population size?

YES:
- It results in under population therefore not enough labour to use the factors of production available efficiently, causing output per capita to decrease
- It results in a fall in demand due to less consumers therefore more Ue as labour is derived demand

NO:
- It reduces over population therefore there is a more efficient use of resources which will increase the output per head
- May reduce over crowding and increasing living space which will increasing the quality of life for the population