Population GrowthWhy is rapid population growth in developing countries so often a source of concern for policy makers and researchers? How does the growth in world population today differ from the historical increase in population growth in the currently developed countries, say, two centuries ago?

Is population growth harmful or beneficial for developmentEmpirical associationInverse relationship, higher average income associated with lower fertility, Sub-Saharan Africa (4-6 children) vs East Asia, and Latin America (2-3 children)(Boserup) 19th C development shows high population growth and density needed for agricultural developmentSocieties with low population densities practised 'extensive' agriculture those with high densities practised 'intensive' agriculture

Optimist's view Population growth provides more genius (Simon) Popuation increases demand for food, prices rise stimulates farmers to producing more food But does this inherent 'genius' need human capital investment? If poor people in poor societies have more children, it's because they think it'll increase their well-being (Bauer) i.e. having more children is a rational choice

Pessimist's view1. Malthusian argument: When wages rise above subsistence increased fertility depresses wage to its biological minimum endogeneity of population keeps per capita income stagnant. Fits 14th C 18th C evaluation depends on concentrating on the benefits of being born vs per capita welfare yardstick.

But do people react to wage rises by increasing fertility? Individuals understand costs of raising children rises while benefits fall as economic development increases economic development associated with greater provision of social security such institutions more effective than any other in lowering fertility rates. People have children for a reason, not just because it's feasible to have theme. Economic progress labour participation rises less likely individuals in an extended family find jobs in the same locality move towards nuclear family costs of child rearing internalised Such factors mean population growth, if endogenous, is a decreasing function of per capita income.

I) Assumes decreasing returns to agriculture, since technology advances impossible within modelII) However, we have seen that due to technological change, decreasing returns were overcome!)

2. Resource allocation failure in the form of market failure/externalities ie. The relative price of goods and services that influence household's decisions about whether to have children are 'wrong' Costs of children may not be incurred entirely by parents:I) population growth strains resources, but costs not purely felt by individual families and borne by society overconsumptionii) If grandparents raise children parents get benefits but less costs

3. Solow model, augmented with population growth,Higher n lower k*, lower y*, lower c*, also lower YPushes economy onto lower trajectory of per capita income (with same growth rate as before)ALSO How does population growth affect savingsFast population growth higher dependency ratio lower per capita savingsBUTEmpirical link between population growth and savings rate unestablished in LDCs

4. Impact on renewable resources: tragedy of the commons, incentive for higher fertility. Large and growing population results in greater risk of 'excessive' use.

BUTPopulation density needed for property rights (Kenyan Highland)KEY ISSUE:better to introduce property rights or limit population

How can we explain relationship between high income and low fertility?Microeconomic theories (Becker 1981)Children viewed as normal good

Price effect: in higher income societies, opportunity cost of parents' time is higher than in low-income countriesSubstitution effect: Parents substitute against quantity for quality

In modern economies, substitution and price effects outweigh the income effect, so high income societies depict lower fertility.