Economics and Rapid Change - The Influence of Population Growth

January 1, 1997

Richard P. Cincotta and Robert Engelman

For more than a decade, since the 1986 release of a seminal report by the U.S. National Research Council, discussion of the impact of population growth on economic change in developing countries has languished within both the demographic and economic fields. While the linkage between demographic and economic dynamics is undeniably complex, some recent findings stand out. Despite lack of clear evidence for this relationship in previous decades, new data make clear that during the 1980s, on average, population growth dampened the growth of per capita gross domestic product, the primary measuring unit of economic growth. The negative effects of rapid population growth appear to have weighed most heavily on the poorest group of countries in the developing world during the 1980s and also throughout the two previous decades.

More positively, declines in human fertility in the 1970s and 1980s almost certainly helped fuel explosive economic growth during the 1980s and early 1990s in such East Asian countries as South Korea, Taiwan, Singapore, the former Hong Kong Territory, Thailand, Indonesia and Malaysia. Several economic studies link the rapid growth in domestic savings experienced in these countries to an increase in the proportion of working adults to dependent children. National studies in various regions provide substantial evidence that smaller families, later childbirths and parents¹ enhanced capacity to plan their families‹factors that slow population growth through declines in fertility‹create opportunities at both household and national levels that have positive implications for education, health, and labor and capital markets.

Population affects the course of national economic development. But so do modern institutions such as competitive markets, flexible public policies and well-run government programs, which help economies adjust to the rapid changes produced by population growth. Adjustment has its costs, however.

This paper draws attention to the long-term consequences of even those institutional adjustments that successfully cope with stresses related to population growth. The authors conclude that the long-term costs of these adjustments are most often paid by groups and interests to which institutions respond inadequately or not at all: the presently marginalized, future generations, and the natural resources on which present and future societies depend.