Essay on Population Growth and Economic Development

1165 Words Sep 18th, 2011 5 Pages
DO LARGE POPULATION A KEY TO ECONOMIC PROGRESS

Introduction:
Thomas Malthus in his published book “An Essay on the Principle of Population” claimed that there is a tendency for the population growth rate to surpass the production growth rate because population increases at a geometrical rate while production increases at an arithmetic rate. Thus, the unfettered population growth in a country could plunge it into acute poverty. However, the pessimist view has proven unfounded for developed economies in that they managed to achieve a high level of economic growth and thus, both population and the real gross domestic product (GDP) per capita were able to increase.

Population growth is seen from both negative as well as positive sides.
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A large population may reduce productivity because of diminishing returns to more intensive use of land and other natural resources. Conversely, a large population could encourage greater specialization, and a large market increases returns to human capital and knowledge. Thus, the net relationship between greater population and economic growth depends on whether the inducements to human capital and expansion of knowledge are stronger than diminishing returns to natural resources. Therefore, it is important to examine the population and economic growth nexus.

Higher population depressed economic growth through diminishing returns. A high rate of population growth not only has an adverse impact on improvement in food supplies, but also intensifies the constraints on development of savings, foreign exchange, and human resources. Rapid population growth tends to depress savings per capita and retards growth of physical capital per worker. The need for social infrastructure is also broadened and public expenditures must be absorbed in providing the need for a larger population rather than in providing directly productive assets.

Population pressure is likely to intensify the foreign exchange constraints by placing more pressure on the balance of payment. The need to import food will require the development of new industries for export expansion and/or import substitution. The rapid increase in school-age population and the expanding number of

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