ECON 3510

African

Economic

Development

See Text, Chapter 6

and class notes.

Demography and

Development

May 13, 2014

I. Theories of Population in the African Context

1. 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 “solitary, poor, nasty, brutish, and

short” for the vast majority of human beings.

(quoting Thomas Hobbes out of context.)

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 Wage Levels, Europe, (G. Clark)

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;

Proximate causes: later marriage; contraception; abortion

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.)

Popula

tion (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 Where are the Countries Africa in this Transition?

Where are the Countries Africa in this Transition?

Probably in both

Phase 2, where death rates (DR)

decline while birth rates (BR) remain

high, so that population growth

actually accelerates and in

Phase 3 where birth rates decline

while death rates are low, so that

population growth slows

decelerates.

Mauritius is an outlier and is

approaching or almost in phase 4 [with FR of 1.4 children per woman; BR of

10.6 live births per 1000 p.a.and DR of 7.3.

per 1000 p.a.and Population growth rate of

0.3% p.a.]

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)

III. The Microeconomic Theory of Fertility

Possible economic benefits of additional

children: Old-age security

Expected income from child labour

Costs of additional children:

Opportunity cost of Mothers’ time

Opportunity and actual costs of educating, & looking after children

How to reduce fertility rates?

Change the costs and the benefits! How?

Some Demographic Indicators, Africa

Total Fertility

Rate 1990-1995 2010-2015

Population

Growth Rate 2000-05 2010-15;

Working Age

Population (15-64)

Africa 6.1 3.6 2.5 2.5 56.4

Ethiopia 7.0 4.8 2.5 2.1 53.2

Kenya 5.6 4.5 2.6 2.7 50.7

Liberia 6.4 4.7 2.2 2.6 50.7

Mauritius 2.3 1.9 1.0 0.3 69.7

Somalia 6.5 6.2 2.4 2.6 53.1

Niger 7.5 7.9 3.5 3.5 49.1

Zambia 5.0 4.2 2.3 1.9 56.4

Source: UNDP HDR 2013

Liberia: Basic Demographic Indicators

1990 2011

Population (million) 2.2 4.1

Population Growth Rates(%) -2.2% +2.6%

Fertility Rates(births per woman)

Urban Population (%)

6.4

40.9

4.7

47.8

Dependency Ratios Children and seniors as % of adults, 15-25

92.7 83.9

Median Age 17.5 18.5

Why do African Fertility Rates Remain

High?

Fertility

Rates in

Africa, 2011

Source: The

Economist,

March 8. 2014

Why do Fertility Rates Remain High in

Many African Countries?

• Children as family labour force;

• Children as old age security

• Rural character of society

• Intergenerational wealth transfers

• Impacts of urbanization

• Access to electricity and consumer stuff

• Education for women: age of marriage

and opportunity costs of having children

• Presence of contraception and abortion

• Religion?

IV. A Note on Demographic Structures:

See: http://www.census.gov/population/international/data/idb/informationGateway.php

African Countries: e.g. Liberia

Kenya

Rwanda

Others China

Japan

Canada

USA

The Chinese Case:

Explain the “Demographic Window of Opportunity”

• Note the prospective “Aging Population” phenomenon and reductions in the

relative size of the “working age population” and the labour force

V. Implications of Rapid Population Growth for African Economic Development

What are they?

Is it a problem? Why?

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 Savings Rapid population growth tends to increase family and

national consumption, thereby reducing savings

3. Investment Rapid 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 high

dependency ratio

Liberia:

Working Age Population: 50.7%

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 Impacts

Population 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

Country

Urban

Population,

millions

1990 2007

Urban

Population %

of Total

1990 2012

Rate of

Urbanization

% per year,

1990-2007

Access to

Improved

Sanitation,

1990 2007

Ghana 5.7 11.2 36 52.6 4.2 11 15

Kenya 4.3 8.0 18 24.4 3.7 18 19

Mauritius 0.5 0.5 44 41.6 0.8 95 95

Nigeria 33.3 70.5 35 50.3 4.4 22 25

Somalia 2.0 3.1 30 38.2 2.7 na na

S. Africa 18.3 28.8 52 62.4 2.7 51

Tanzania 4.8 10.1 19 27.2 4.4 29 31

Sub-Saharan

Africa, Total

144.3 287.1 28 37.0 4.0 20 24

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

HDR 2013

VI. Population Policies

Should governments pursue active population control policies ?

or

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

i.e. Does “Development” lead automatically

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 1. policies enhancing the status of women

2. promoting education in general and especially for girls

3. promoting breast-feeding,

4. reducing child labour

5. promoting higher labour force participation rates for women

6. 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:

Coercive Approaches

China:

one child policy, with enforcement; rural exceptions, two in some cases

male child biases

India, Indira Gandhi:

Semi-coercive male sterilization (with reward of transistor radio)

Politically disastrous

India: Current Male child bias and selective 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?