Population

How population changes

Population changes for three reasons only:

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Population change = (births − deaths) + (immigration − emigration)

• Birth rate: live births per 1,000 people per year.
• Death rate: deaths per 1,000 people per year.
• Natural increase: birth rate minus death rate.
• Net migration: immigration minus emigration.

What affects the birth rate

• Living standards: as incomes rise, birth rates usually fall.
• Infant mortality: where many children die young, families have more children. Falling infant mortality reduces the birth rate.
• Female education and employment: the strongest single influence. Educated women in work tend to have fewer children and have them later.
• Availability of contraception and family planning.
• Religion and culture.
• Government policy: child benefits raise birth rates; population-control policies lower them.
• The cost of raising children, which is far higher in developed economies.
• In agricultural economies, children are economic assets who work on the farm and support parents in old age; in developed economies they are largely a cost.

What affects the death rate

• Healthcare: doctors, hospitals, vaccination.
• Diet and nutrition.
• Clean water and sanitation: historically the biggest killer of infants.
• Living and working conditions.
• War, conflict and natural disasters.
• The age structure: an ageing population has a higher death rate even though people live longer, which surprises students.

Why growth rates differ between countries

Effects of population changes

A rapidly growing population

Advantages: a larger labour force; a bigger domestic market, allowing economies of scale; more people of working age in the long run.

Problems: pressure on schools, hospitals and housing; a high dependency ratio of children; unemployment if jobs do not grow as fast; environmental strain; and lower GDP per capita if output does not rise as fast as population.

An ageing population

Causes: falling birth rates and rising life expectancy.

Consequences:

• A higher dependency ratio, fewer workers supporting more retired people.
• Higher spending on pensions and healthcare, so higher taxes on those working.
• A shrinking labour force, which can hold back growth.
• A shift in the pattern of demand towards healthcare, care homes and leisure for the elderly.
• Governments may respond by raising the retirement age, encouraging immigration, or encouraging higher birth rates.

Net emigration of skilled workers, the "brain drain", costs a developing country the doctors, engineers and teachers it has paid to educate. Against that, emigrants send home remittances, a major source of income for many countries (6.4).

Optimum population

Optimum population is the size of population that produces the highest output per head, given the country's resources, technology and capital.

Below the optimum the country is under-populated, resources are not fully used, and adding people would raise output per head. Above it the country is over-populated, each extra person adds less than the average, so output per head falls.

Note that this is about population relative to resources, not simply crowding. A densely populated country with abundant capital may be under-populated; a sparsely populated one with poor resources may be over-populated.

Worked example

A developed country has a birth rate below its death rate and rising life expectancy.

1. The population ages
2. the proportion of retired people rises while the working population shrinks
3. the dependency ratio rises
4. government spending on pensions and healthcare increases
5. but the tax base is smaller
6. so taxes on workers must rise, or spending elsewhere must fall.

Possible responses and their drawbacks:

• Raise the retirement age: keeps people in work and paying tax, but is politically unpopular and hard on manual workers.
• Encourage immigration of working-age people, fast and effective, but may face political opposition and add pressure on housing.
• Encourage higher birth rates with child benefits and childcare, but the extra children are dependants for twenty years before they help.

Judgement: immigration and a higher retirement age work within years; raising the birth rate takes a generation and worsens the dependency ratio before improving it.

Common exam mistakes

• Forgetting migration, population change is not just births minus deaths.
• Saying an ageing population is caused only by people living longer; the falling birth rate matters just as much.
• Confusing a falling birth rate with a falling population, a population can still grow.
• Saying population growth is always bad; a larger labour force and market are genuine advantages.
• Defining optimum population as the population a country can "fit", rather than the one maximising output per head.

Exam technique

For "reasons why the birth rate is falling", the highest-value points are female education and employment, falling infant mortality, and the cost of children. Explain the mechanism, not just the label.

For effects questions, split into short run (pressure on services, dependency) and long run (larger workforce, bigger market).

For evaluation, use the dependency ratio and the distinction between total output and output per head, a bigger population usually raises total GDP while possibly lowering GDP per capita.

Building an answer

4 marks, "Explain two reasons why birth rates fall as a country develops."

As female education and employment improve, the opportunity cost of having children rises, because time spent raising them is time out of paid work, so families choose to have fewer.
Falling infant mortality means parents no longer need large families to ensure some children survive, so the number of births required to reach a desired family size falls.

6 marks, "Analyse the economic consequences of an ageing population."

The dependency ratio rises: a smaller working population supports more retired people, so each worker's tax burden increases.
Government spending shifts towards pensions and healthcare, which are the most expensive age-related services, putting pressure on the budget.
The labour force shrinks, which can constrain output and create shortages in particular occupations.
Consumption patterns change, so resources must be reallocated towards healthcare, housing adapted for older people and leisure services, a structural change that takes time and causes frictional unemployment on the way.
Not all effects are negative: older workers carry experience, and rising life expectancy reflects a genuine improvement in living standards.

The demographic transition, in four stages

The key insight is that death rates fall before birth rates. That lag is what produces the population explosion in stage 2, and it is exactly what a 6-mark question on rapid population growth is asking about.

Optimum population

The population size that produces the highest output per head, given a country's resources and technology. Below it a country is under-populated, resources are not fully exploited. Above it, over-populated, output per head falls as resources are spread too thinly. The concept is relative to resources, not an absolute number, which is why Australia and Bangladesh cannot be compared by population alone.

A real case to quote

Japan. Around 29% of the population is over 65, the highest share in the world. The consequences are visible: a shrinking workforce, sustained pressure on pension and health spending, rural depopulation, and heavy investment in robotics to substitute for labour. It is the clearest live example of every consequence in the list above.

Quick revision

• Population change = (births − deaths) + net migration.
• Birth rate falls with female education, lower infant mortality, contraception and the rising cost of children.
• Death rate falls with healthcare, nutrition, clean water and sanitation.
• Developing countries: high birth rate, young population, rapid growth. Developed: low birth rate, ageing population.
• Ageing population → higher dependency ratio, pension and healthcare costs, smaller labour force.
• Brain drain costs skills but brings remittances.
• Optimum population maximises output per head, given resources and technology.

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