5.3 – Population

Population is the total number of people inhabiting a specific area. Two-hundred years ago, the world population was just over a billion, now it is about 7.7 billion, with China and India having populations above 1 billion each! It is projected to hit 10 billion by 2056.

Factors that affect population

• Birth rates: the average number of children born in a country each year compared to the total population of an economy is known as the birth rate. This is usually expressed as the number of births for every 1000 people in the population.
  Why do different countries have different birth rates?
  • Living standards: improved quality and availability of food, housing, clean water and medical care result in fewer babies dying. Countries where children often die due to poor living standards have higher birth rates (people have more children fearing that some of their children might die. These children can then work to produce food and earn incomes).
  • Contraception: increased use of contraception and legalisation of abortion have reduced birth rates in developed countries.
  • Customs and religion: many religious beliefs don’t allow the use of contraceptive pills, so birth rates in those communities rise. In developed economies it is now less fashionable to have large families, so birth rates have fallen.
  • Changes in female employment: more females in developed countries entering the labour force  has resulted in falling birth rates since they do not want motherhood to affect their careers.
  • Marriage: in developed countries, people are tending to marry later in life, so birth rates have reduced.
• Death rates: the number of people who die each year compared to every 1000 people of the population is the death rate of an economy.
  Reasons for differing death rates in different economies:
  • Living standards: just as birth rates, death rates also tend to be very high in less-developed economies due to lack of good-quality food, shelter and medical care. Malnutrition remains the major cause of high death rates in these countries. In developed countries, the major causes of death include lifestyle diseases, mostly caused by unhealthy diets.
  • Medical advances and heath care: lack of medical care and infrastructure in less-developed countries continue to be a cause for high death rates.
  • Natural disasters and wars: hurricanes, floods, earthquakes and famine due to lack of rain and poor harvests, and wars and civil conflicts increase death rates.
• Net Migration: migration refers to the number of people entering (immigration) and leaving (emigration) the country. Net migration measures the difference between the immigration and emigration to and from an economy. A net inward migration will increase the working population of the economy, but can put pressure on governments finances as demand for housing, education and welfare increase. A net outward migration may increase the income per capita (if the emigrants send money to families back home) and thus the HDI, but can result in loss of skilled workers.
  Reasons for differing net migration in different economies:
  • Living standards: people move to countries where living standards are high which they can benefit from.
  • Employment/wages: people migrate mainly to seek better job opportunities. Widespread unemployment and low wages in the home country will cause people to move to countries with better employment opportunities and higher wages.
  • Climate: very cold or very warm countries/regions will face more emigration than other countries.

Population structure

The structure of a population can be analyzed using:

• Age distribution: the number of people in each age-group.
  Falling birth and death rates mean that the average age in developed countries are rising whereas in developing and less-developed economies, high death and birth rates result in low average ages. The median age in developed Monaco is highest at 53.1 while in under-developed Niger it is just 15.3. Dependency ratio is the ratio of the dependent population (those outside the labour force – children and senior citizens – who depend on the labour force to supply them with goods and services by paying taxes) to the total population in an economy. A high dependency population, such as in Japan, put pressure on the government to increase taxes rates in order to raise more revenue to support the dependents, putting pressure on the labour force.
  Consequences of an ageing population:
  • The workforce will decline and there will be much dependence on the tax-paying population to fund the welfare of old people.
  • Increase in demand for products for old people including healthcare.
  • The government will have to spend more on housing, old age welfare schemes etc.
  • Old people are less mobile and so the economy will be slow to adapt to new technologies.
• Gender distribution: the balance of males and females. The sex ratio measures the no. of males to the no. of females (the global sex ratio is 101:100; while Arab countries have sex ratios as high as 2.87, island countries register low sex ratios). Since the average female lives longer than the average male, there are more females in the older age-groups than males. Gender imbalance is an excess of males or females and is caused by
  • Wars killing many young males
  • Violence towards females (honour killings, rapes)
  • Sex-specific immigration – more males immigrate to a country looking for work
    Consequences of changes in the gender distribution:
  • having more females will encourage birth rates to rise and increase population growth
  • more females in employment will increase productivity
  • more females in education and employment will increase living standards
  • a more balanced gender distribution can aid better social equality as social attitudes towards women in education and employment become progressive

Population pyramids display the age and gender distribution of an economy. The vertical axes show the age groups and the horizontal axes show the gender groups- males on the left and females on the right.

• Geographic distribution: where people live. 90% of the world population live in developing countries. This puts a lot of pressure on scarce resources in these countries. About half of the world population live in urban areas, and this continues to rise, which has helped increase production and living standards but resulted in rapid consumption of natural resources and high levels of pollution and congestion.
• Occupational distribution: what jobs people work in. In developed economies, more people work in the service sector while in less-developed economies, most people work in agriculture. In developing economies, there is a huge migration of workers from primary production to manufacturing and service sectors. Female employment and self-employment are also rising, which will add to production and higher living standards.

An optimal population is one where the output of goods and services per head of the population is maximised. An economy is underpopulated when it does not have enough labour to make the best use of its resources; and it is overpopulated when the population is too large given the resources it has.

Effects of increasing population size

• Increases size of the home market and thus potential for increase in aggregate demand in the long-run.
• Higher demand and incomes will lead to more economic growth and expansion.
• Increased supply of labour.
• Puts more pressure on already scarce resources, especially land.
• More capital goods will have to be produced to sustain and satisfy the needs and wants of the enlarged population.
• Fall in rate of productivity in line with the law of diminishing returns – too many people working on limited resources means low productivity.
• Shift of employment and output from the primary sector towards the services sector because land for primary activities is fixed, but want for services is practically infinite as population grows, and the emergence of mechanisation and technologies will force people out of the primary sector.
• Congestion of urban centres: as population and incomes rise, people will move to cities and towns which will become crowded. There will be need for heavy transport, communications, housing, waste management infrastructure spending.

Notes submitted by Lintha

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