<5.3 POPULATION>

From what we have read above regarding the factors that determine differences in population we can infer that a DEVELOPING NATION is likely to have:

• A YOUNG POPULATION due to LOWER LIFE EXPECTANCY AND HIGHER DEATH RATE due to POOR HEALTHCARE/NUTRITION

• A HIGH BIRTH/FERTILITY RATE due to the LOWER COST OF RAISING CHILDREN, as well as the NEED FOR  CHILDREN TO SUPPORT THEIR PARENTS later in life.

• Suffer from NET EMIGRATION due to RELATIVELY LOWER LIVING STANDARDS.

• etc...

From what we have read above regarding the factors that determine differences in population we can infer that a DEVELOPED NATION is likely to have:

• AN OLDER POPULATION due to HIGHER LIFE EXPECTANCY and LOWER DEATH RATE, due to GOOD HEALTHCARE & NUTRITION

• A LOW BIRTH/FERTILITY RATE due to the HIGH COST OF RAISING CHILDREN as well as NO REQUIREMENT FOR  CHILDREN TO SUPPORT THEIR PARENTS later in life.

• Suffer from NET IMMIGRATION due to RELATIVELY HIGHER LIVING STANDARDS.

• UNDERPOPULATED refers to the scenario when there is SURPLUS of unused resources relative to the number of workers.

  • • • If population grows and BELOW optimal

        • • (+) Improve the use of resources

          • (+) Larger market => economies of scale

          • (+) Extra demand, stimulates investment

          • (+) larger labour force

• OVERPOPULATED  refers to the scenario when there is SHORTAGE of resources relative to the number of workers.

  • • • If population grows and ABOVE optimal

        • • (-) Food, housing, welfare shortages

          • (-) Environmental impact eg more waste

          • (-) More unemployment => welfare spending

• ECONOMIC GROWTH refers to INCREASES in the LEVEL OF REAL GDP, as a result of INCREASES in the QUANTITY and QUALITY of an economy's FACTORS OF PRODUCTION.

• Population growth resulting from net immigration/natural increase (rise in birth rate/fall in death rate) may INCREASE IN THE SIZE OF THE LABOUR FORCE, increasing productive potential/ability to produce products will rise.

• The QUALITY OF THE LABOUR FORCE MAY INCREASE if the high population growth is the result of the immigration of skilled workers/more young people who have received better education than their elders, as this will increase productivity, increasing productive potential/ability to produce products will rise.

• A growing population will ineviatably lead to INCREASES IN DOMESTIC DEMAND which will encourage firms to increase their output. This may also ATTRACT MNCs to set up in the country. 

• A higher population may make better use of resources and allow firms to take advantage of ECONOMIES OF SCALE.

• ECONOMIC GROWTH refers to INCREASES in the LEVEL OF REAL GDP, as a result of INCREASES in the QUANTITY and QUALITY of an economy's FACTORS OF PRODUCTION.

• A higher population may increase economic growth in terms of output but IF POPULATION GROWTH > GDP GROWTH then GDP PER HEAD FALLS.

• A higher population may PUT PRESSURE ON RESOURCES and there may be less capital/land per worker, reducing productivity and resources may be diverted from increasing the productive capacity to coping with more dependents.

• If the pop. growth consists of a RISE in the ELDERLY LIVING LONGER rather than MORE BIRTHS then it WON'T CONTRIBUTE TO ANY GROWTH IN THE SR.

LIVING STANDARDS can be measured in terms of the dimensions used in the HDI, such as HEALTHCARE (LIFE EXPECTANCY), EDUCATION (YEARS OF SCHOOLING), and INCOME (GDP PER CAPITA)

• If there is an increase in the labour force MORE OUTPUT (REAL GDP) implying GREATER INCOME GENERATION.

• With a larger population, market size will increase which may enable firms to take greater advantage of ECONOMIES OF SCALE, which lowers the average prices and RAISES REAL INCOMES makes items more affordable.

• A large population is more attractive to MNCs who will wish to set up in the country in order to satisfy the growing demand, CREATING JOBS and INCOMES. In addition they will CREATE INFRASTRUCTURE to ensure GREATER GROWTH.

• A larger population will inevitably mean GREATER TAX REVENUES, which can be used to invest in MERIT GOODS, such as eductaion and healthcare

• Net immigration of workers may bring in new skills, that help OPEN NEW INDUSTRIES, CREATE JOBS and INCOME.

LIVING STANDARDS can be measured in terms of the dimensions used in the HDI, such as HEALTHCARE (LIFE EXPECTANCY), EDUCATION (YEARS OF SCHOOLING), and INCOME (GDP PER CAPITA)

• If the higher population is a result of longer life expectancy amongst the over 65s then this may imply no gains to GDP simple a HIGHER DEPENDENCY RATIO, making the average citizen poorer.

• If the population growth is extensive it may put PRESSURE ON LIMITED RESOURCES such as housing , school places, doctor services, etc...

• Additionally, if the population growth is too sharp then their may be EXTERNAL COSTS such as pollution, erosion, and congestion.

• If the population increases more rapidly than output, then GDP per head will lower.

• If Emigration of dependents (1) would REDUCE THE DEPENDENCY RATIO on the remaining working population.

• REDUCES GOV'T SPENDING on BENEFITS/PENSIONS etc... which means government spending on other items can increase•   

• If the emigration reduces  an overpopulated location then OUTPUT PER HEAD SHOULD RISE per head should rise due to more efficient use of resources•   

• REMITTANCES MAY RISE as those who emigrate may send money back to relatives so this may increase living standards• 

• EMIGRANTS RETURN WITH NEW SKILLS and this may raise the productivity of the labour force 

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• (1) Net emigration of workers (1) may result in money (remittances) being set home (1) such remittances may increase the income of their families (1) allowing them to buy basic necessities (1). Net emigration may result in ideas being set home (1) workers may later return with better skills (1) raising the country’s output (1) increasing employment (1). Wages may be raised (1) to retain workers (1). If a country is overpopulated (1) net emigration may enable there to be better use of resources (1). Net emigration of older people (1) may reduce dependency (1) lower cost of pensions (1) lower healthcare costs (1). Net emigration of unemployed/low-paid workers may reduce the number living in poverty (1)

• BRAIN DRAIN as skilled workers may emigrate this will REDUCE THE QUALITY OF THE LF, which LOWER PRODUCTIVITY.

• LESS ATTRACTIVE TO MNCs  who will be deterred by the LACK OF SKILLED WORKERS.

• DEPENDENCY RATIO WILL RISE if mostly people of working age emigrate, this will leave less 15-64 year olds to take care of the 0-14 & 65+ population.

• CREATES UNDERPOPULATION, as the fall in population would result in a less than optimal levels and thus a fall in output per head. 

• LESS TAX REVENUE collected as there are less workers, meaning there are less funds for MERIT GOODS such as education and healthcare.

......

• LARGER LABOUR RESOURCES, if the immigrants are of  working age this could increase the productivity of the economy increasing the supply-side capacity of the economy leading to economic growth. 

• WILLINGNESS TO TAKE JOBS LOCALS WON'T hence filling seasonal shortages and improving overall productivity whilst keeping costs and prices low for example farm-hands.

• WILLINGNESS TO WORK FOR LOWER WAGES so production COSTS would FALL leading to LOWER PRICES.

• JOB COMPETITION LEADS TO BETTER QUALITY WORKERS  as Immigration leads to increased competition for jobs so all workers need to IMPROVE their SKILLSETS, and PRODUCTIVITY in order to find work.

• IMMIGRANTS BRING CAPITAL to start their own business CREATING MORE JOBS.

• IMMIGRANTS SPEND THEIR INCOMES which will increase domestic consumption increasing total aggregate demand and creating ECONOMIC GROWTH economic growth.

• IMMIGRANTS THAT WORK WILL PAY DIRECT TAXES which will INCREASE TAX REVENUE enabling more government spending on MERIT GOODS.

• IMMIGRANTS TAKE JOBS AWAY FROM LOCALS, which means domestic unemployment in that country rises.  

• SOCIAL UNREST / RACIAL DISHARMONY may occur when BETTER SKILLED & QUALIFIED immigrants take jobs from less qualified and lower skilled local workers.

• DEPRESS DOMESTIC WAGE GROWTH as Immigrants may be more willing to take up jobs with lower pay while locals will not feel that such low pay is appropriate depressing wage growth.  LINK LINK