ECON 3510

African Economic Development

Demography and

Development

[See Text, Chapter 6]

May 18, 2010

I. Theories of Population in the African Context1. Malthus Theory and Demographic History

2. The Demographic Transformation

3. Microeconomic Theory of Population

II. African Demographic Experience

III. Note on Demographic Structures

IV. Implications of Rapid Population Growth for African Economic Development

V. Population Policies

Agenda

1. Malthus Theory of Population Growth:

- people had an uncontrollable urge to procreate![This would not diminish as civilization

progressed.]

- population growth would continue at a rapid pace (“geometrically”)

- Agriculture was subject to limited land and diminishing returns. (“arithmetic”)

- population would expand to the point where the “positive checks” would operate.

Famine, Disease and War.

Result: incomes would fall to the starvation level.

Life would be “nasty, brutish and short” for the vast majority of human beings.

Is this or was this in fact the case?

World Population

An Economic History of the World!(courtesy of G. Clark, A Farewell to Alms)

Real Output per Worker in England, 1260-1960. (G.Clark)

Was there any escape from this fate?

Was there any escape from this fate?

Malthus’ Recommendation:

Establish “Preventative Checks” on population:

- “Moral Restraint,”

- Delay of marriage

How probable were these ?

Was Malthus’ Vision Correct?

In general maybe “No” • at least for recent centuries • though some parts of the world maybe

caught in a

“Malthusian Population Trap.”

Why or Why Not?

Malthus’ predictions: unfulfilled for high & medium income countries:

1. Technology of contraception was unforeseen;

2. Family Planning;

3. Technological change has postponed the impacts of serious diminishing returns; agricultural output has in fact grown more rapidly than population.

Why?

4. Has the “urge to procreate” declined?

5. Social and sociological impacts of “Modernization” and Urbanization on birth rates were unforeseen:

- Higher female labour force participation;- Higher status for women: increases education and

reduces child-bearing- Higher costs of raising children in modern urban

areas vis-à-vis agriculture and rural areas- Cultural factors: more Television etc. etc.- Less need for children as family labour and old

age security;

Can Rapid Population Growth be Positive?

Esther Boserup: Yes

Population growth greater population density innovation & productivity;

economies of scale

better support for infrastructure

Simon:

Short term results likely negative

Long term results, may be positive

Was Malthus’ Vision Correct for “Africa”?

Are (some of) the Countries of Africa Approaching a Malthusian Trap?

Why or Why Not?

Some Comparative Demographic Information

Country Size(square kms.)

Population(Millions,

2005)

Population Density

(persons per square km.,

2001)

Population Growth

Rate(per cent)

Fertility Rate

(Children per

Woman)

Burundi

Rwanda

Malawi

28,000

26,000

118,000

7.9

9.2

13.2

282

354

112

2.2

2.0

2.2

6.8

5.7

6.1

Nova Scotia

New Brunswick

55,000

73,000

0.913

0.730

17

10

II. Theory of the Demographic Transition

(See Charts below)Stage 1: High Birth Rate and Death rate

Population stability

Stage 2: Falling death Rate; Continuing High Birth Rate: Population increasing faster and faster;

Stage 3: Death Rate Decline Intensifies; Birth Rate Decline accelerates;

Population Growth continues but decelerates

Stage 4: Low Death Rate and Low Birth Date: Population Stability

To which I would add Stage 5: The Current Reality for High Income Countries?

Death Rates Continue at a low level; Birth Rates fall further

Population Size Declines

www.ldeo.columbia.edu/edu/dees/V1003/imagres/demographic .transition2

Stage 5,

Explaining the Demographic Transition

Factors Affecting Death Rates:

Factors Affecting Birth Rates:

Usefulness of Approach

III. The Microeconomic Theory of Fertility

Application of basic microeconomic theory to the child-bearing decision.

Assumption: children are at least in part a good like others, providing “consumption” benefits to the parents and serving also as an investment good (providing labour and generating family income)

Possible economic benefits of additional children: Old-age securityExpected income from child labour

Costs of additional children:Opportunity cost of Mothers’ timeOpportunity and actual costs of educating, & looking after

children

How to reduce fertility rates? Change the costs and the benefits! How?

Why do African Fertility Rates Remain High?

Some Demographic Indicators, Africa 2000-2005

Total Fertility Rate

Population Growth Rate

Working Age Population (15-64)

Africa 4.7 2.3 56.4Ethiopia 5.3 2.5 53.2

Kenya 5.0 2.6 50.7

Liberia 6.8 4.2 50.7

Mauritius 1.9 0.8 69.7

Somalia 6.0 3.0 53.1

Uganda 5.2 3.1 58.0

Zambia 3.2 1.9 56.4

Why do African Fertility Rates Remain High?

• Children as family labour force;• Intergenerational wealth transfers• Children as old age security;• Religion?

• Rural character of society• Impacts of urbanization• Pervasiveness of electricity and consumer stuff• Education for women: age of marriage and

opportunity costs of having children• Presence of contraception and abortion

Hans Rosling on Statistics, Demography and Poverty

• http://www.ted.com/index.php/talks/hans_rosling_reveals_new_insights_on_poverty.html

As a doctor and researcher, Hans Rosling identified a new paralytic disease induced by hunger in rural Africa. Now the global health professor is looking at the bigger picture, increasing our understanding of social and economic development with the remarkable trend-revealing software he created.

IV. A Note on Demographic Structures:

See: http://www.census.gov/ipc/www/idbpyr.html

African Countries:e.g. Kenya

Rwanda

High Income Countries:e.g. Japan

Canada

The Chinese Case:

Explain the “Demographic Window of Opportunity”

• Note the prospective “Aging Population” phenomenon and reductions in the relative size of the labour force

V. Implications of Rapid Population Growth for African Economic Development

What are they?

V. Implications of Rapid Population Growth for African Economic Development

1. Impact on Income per Capita:When population is growing rapidly, economic growth

must grow exceed Population Growth Rates to maintain income per capita. i.e. income per capita = income/population

2. Effects on SavingsRapid population growth tends to increase family and

national consumption , thereby reducing savings

3. InvestmentRapid population growth requires that large

amounts of resources must be devoted to investments, to keep up with Population. Growth.

4. “Dependency” ratios:Rapid population growth leads to “bottom heavy”

population pyramids, which means the working age population of a country is relatively small as a % of total population., or a highdependency ratio

5. Effects on Employment and Unemployment:

Ever-growing cohorts of young people are entering the job market, adding to labour supply. Can the demand for labour demand keep up?.

6. Impacts on Income Distribution:Because family size is highest among the poor,

rapid population growth affects income distribution negatively. – The numerous children of the poor have less

monetary, family or parental investment in their up-bringing

– They start off in life with minimal inheritances.

7. Environmental ImpactsPopulation growth in many places results in

poor rural people being pushed into ever more marginal and environmentally-inappropriate farm lands.

Urban environmental strtesses with rapid urbanization

8. Rapid Urbanization

Urbanization in Africa: Some Indicators

CountryUrban

Population, millions

1990 2007

Urban Population %

of Total1990 2007

Rate of Urbanization% per year, 1990-2007

Acces to Improved

Sanitation,1990 2007

Ghana 5.7 11.2 36 49 4.2 11 15

Kenya 4.3 8.0 18 21 3.7 18 19

Mauritius 0.5 0.5 44 42 0.8 95 95

Nigeria 33.3 70.5 35 48 4.4 22 25

Somalia 2.0 3.1 30 36 2.7 na na

S. Africa 18.3 28.8 52 60 2.7 51

Tanzania 4.8 10.1 19 25 4.4 29 31

Sub-Saharan Africa, Total

144.3 287.1 28 36 4.0 20 24

Source: World Bank, World Development Indicators, 2009 Table 3.11

VI. Population Policies

Should governments pursue active population control policies ?

Should Governments wait for the “Demographic Transition” to occur automatically?

i.e. Does “Development” lead to Population Stability?

This has been controversial, for various reasons

Types of Programs:

1. Internal Migration?A few countries have tried to relieve

population pressures in some areas by migration to other under-populated areas (Amazonia in Brazil; the outer islands in Indonesia.)

Potential for Africa?.

2. International Migration?The annual population increase in Africa

(about 23 million) is too large to be relieved significantly via international migration.

Is this correct?

3. Constructing a policy environment promoting greater desire for smaller families

Governments can change the environment in which families decide to have children

- by designing programs and policies that will induce parents to choose to have fewer children and reduce family size.

Of special importance are – policies enhancing the status of women– promoting education in general and especially for

girls– promoting breast-feeding, – reducing child labour– promoting higher labour force participation rates

for women– improving social security and pensions (so fewer

children are necessary to look after their aged parents)

Also: - promoting contraceptive use

- legalizing abortion?

4. Specific Family Planning Programs:

Promote Family Planning• If families want large families in any case (for

family labour purposes, for old-age security, etc.)- they may not be interested in family planning

facilities even if they are available.• If families want smaller families due to the types of

factors mentioned above:- then making family planning facilities

available can have an important impact.- Integrate family planning with maternal and

early child care?

Fertility Rates, Africa 1900-2007

Fertility Rate1990

Fertility Rate2007

Population Growth Rate

Africa 6.3 5.1 2.3Ethiopia 6.8 5.3 2.5

Kenya 5.8 5.0 2.6

Liberia 6.9 5.2 4.2

Mauritius 2.3 1.7 0.8

Nigeria 6.7 5.3 2.1

Somalia 6.8 6.0 3.0

Uganda 7.1 6.7 3.1

Zambia 6.4 5.2 1.9