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Population and Development

The twentieth century saw unprecedented population growth - the number of people grew from 1.6 billion to 6.0 billion by 2000, with 80 percent of the increase occurring since 1950.  Most of the increase was in developing countries, where continued high rates of population growth outpace the provision of public services. The large increase in global population hides regional variations.  Since 1965, Asia, where half the world’s people live, has added close to 1.6 billion people to its population.  But Sub-Saharan Africa, whose population nearly tripled, had the largest percentage increase.  

See where people are living in the world today.

The synergies between demographic growth, age distribution and population momentum, on one hand, and economic growth and development on the other, have long been debated amongst policy makers and the research community. How does high fertility affect poverty and how does poverty affect high fertility? What policies should be in place to promote development and ease population growth? Does population stability promote development or vice versa? In 1986, a comprehensive review by the US National Academy of Science concluded that “slower population growth is beneficial to economic development for most developing countries.” (¡) Current research identifies new evidence that results in a debate between three alternative positions: does population growth restrict, promote, or is it independent of economic growth.(ii) Each position has the evidence to support their case. However, each of these explanations focus on population size and growth and under-emphasize perhaps the most critical issue: the age distribution of the population. The age distribution (the way in which the population is distributed across different age groups) can dramatically change as the population grows or shrinks. Notwithstanding these controversies, a significant consensus has emerged around the idea that rapid population growth exerts severe constraints on countries and regions at low levels of socioeconomic development. (iii)(iv)

People’s economic behavior changes at different stages of life. Therefore, changes in a country’s age structure can have significant effects on its economic performance.(v) In developing countries that have not yet gone through a demographic transition, high fertility and mortality indicates high child-dependency ratios and low old-age dependency ratios (dependency ratio is a measure of the portion of a population which is composed of dependents, i.e. people who are too young or too old to work compared to people who are working).  As the demographic transition begins to take place, mortality begins to decline causing an increase in the proportion of children in the population, which increases the dependency ratio.  Fertility then begins to decline, which initiates a period of declining child-dependency ratios and declining total dependency ratios. Finally, the elderly population begins to increase and old-age dependency ratios and total dependency ratios rise. At the end of the demographic transition, often the dependency ratio equals that what it was prior to the transition. However there then exists an enormously different age composition.(vi)

How have demographics changed?

During the time when a high proportion of a country’s population falls within the working age group (low dependency ratio), the added productivity of the working group can produce a window of economic opportunity. The size of this window, or demographic bonus or dividend as it has become characterized, depends on the duration and pace of fertility decline and, to a lesser extent, the way in which mortality decline affects infants and children.(vii) The situation of East Asian countries has shed light on the impact of sharp fertility declines on economic performance.(viii)

Countries undergoing their demographic transition have an opportunity to capitalize on the demographic bonus. However, changes in the age structure can only be exploited when they are accompanied by adequate investments and sound public policies. Further, the demographic bonus is not a permanent state, but rather an opportunity that must be seized over a relatively short period of time before population aging sets in.(ix)

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(i) National Research Council (1986): Population Growth and Economic Development: Policy Questions. Washington, DC: National Academy of Science Press.
(ii)  Bloom, D., Canning, D., Sevilla, J., Economic Growth and the Demographic Transition, Working Paper 8685 http://www.nber.org/papers/w8685National Bureau of Economic Research
(iii)  May, J., Population Policy, in: Poston and Micklin Handbook of Population Chap28 (forthecoming)
(iv)  Birdsall, N., Sinding, S., How and Why Population Matters: New Findings, New Issues, in: Population Matters Demographic Change, Economic Growth, and Poverty in the Developing World,New York, Oxford University Press, 2001.
(v) Bloom, D., Canning, D., Sevilla, J., Economic Growth and the Demographic Transition, Working Paper 8685 http://www.nber.org/papers/w8685 National Bureau of Economic Research.
(vi) Population and Economic Change in East Asia, CY Cyrus Chu and Ronald Lee eds. A supplement to Vol. 26 2000 of Population and Development Review
(vii)  Merrick, T., Background paper to Achieving the MDGs: Poverty Reduction, Reproductive Health and Health Sector Reform Course, Wednesday 20 October, 2004, Turin, Italy.
(viii)  May, J., Population Policy, in: Poston and Micklin Handbook of Population Chap28 (forthecoming)
(ix)  Bloom, D., Canning, D., Sevilla, J., Economic Growth and the Demographic Transition, Working Paper 8685http://www.nber.org/papers/w8685 National Bureau of Economic Research

 

Other resources:
While we hope you might find the links below of interest, please note the World Bank is not responsible for the content of external websites.

 

 

Population and Poverty (presentation; Merrick)

Population and the Economy: Does Population Growth Matter? (presentation; Mason)

Demographic Rationale (RAND)

Population and Poverty: Some Perspectives on Asia and the Pacific (Bernstien)

The Great Population Debates (Sinding)

Population Policies and Programs in East Asia (edited by Mason)

Population Matters: Demographic Change, Economic Growth, and Povery in the Developing World (Birdsall, Kelley, Sinding)
 

Long-term Global Demographic Trends: Reshaping the Geopolitical Landscape  

 

Economic growth and stagnation with endogenous health and fertility (Strulik)

 

International Labor Migration and Social Security (Geide-Stevenson, Ho)

 

Understanding the Demographic Dividend (Ross)