To facilitate the implementation of the national population policy, the appreciate the nature of the relationship between population dynamics and development. The relationship between population growth and economic growth is the Organization for Economic Cooperation and Development (OECD;. Ernesto Pernia at National Economic and Development Authority, Republic of . of population growth and economic development with a discussion on their .. validity of the hypothesis on the relationship between population.
Draw policy implications from the study.
And with continued divergence of opinions regarding the consequences of population growth on economic development, this study will thus serve as a necessary contribution to knowledge offering information regarding the same in Kenya.
The study will also serve as a resource material to policy makers and scholars by providing the relevant information regarding the issue. Secondly, it provides information on the impact of population growth and how these growths influence the economic development. The results of this study will be helpful to the policy makers by giving them useful information on various explanatory variables that may be targeted in the evaluation of policy changes and the provisions of new policies in order to enhance the desired level of economic growth.
The study may help to provide useful information to the private and the public agencies in designing projects and programmes that can assist in bringing a balance between growth in population and growth in economic growth. Given the big scope on the topic of population, the research is narrowed down only to the study of population growth.
This has left out the other dimensions of population which include population density and size structure, and also population aging. Thus there is room for further research on the effect of these other dimensions of population on economic development. Whereas population grows at a geometric rate, the production capacity only grows arithmetically. Therefore in the absence of consistent checks on population growth, Malthus made the prediction that in a short period of time, scarce resources will have to be shared among an increasing number of individuals.
THE IMPACT OF POPULATION CHANGE ON ECONOMIC GROWTH IN KENYA
However, such checks that ease the pressure of population explosion do exist, and Malthus distinguished between two categories, the preventive check and the positive one.
The preventive check consists of voluntary limitations of population growth. Individuals before getting married and building a family, make rational decisions based on the income they expect to earn and the quality of life they anticipate to maintain in the future for themselves and their families. The positive check to population is a direct consequence of the lack of a preventive check. When society does not limit population growth voluntarily, diseases, famines and wars reduce population size and establish the necessary balance with resources.
Boserup found out that population growth is an autonomous factor, which affects agricultural productivity rather than being affected by it, as suggested by the Malthusian school. The study claimed that Malthus' assumption of diminishing returns to labor needs not hold in the long run, as higher population may lead to a more efficient division of labor as well as to improved agricultural practices signaled by the frequency of cropping.
The study concluded that soil fertility should not be viewed as fixed and given by nature, but instead can be improved by substituting the agricultural technology to a better one, which is likely to be a result of an increase in population. Primitive communities with higher population growth rates are more likely to experience economic development, provided that the necessary investment in agriculture in undertaken.
Thirlwal investigated the relationship between population growth and economic development with special reference to developing economies. The study found out that the relationship between population growth and economic development is a complex one, particularly concerning what the cause is and what the effect is.
Rapid population growth lowers per capita income growth in least developed countries LDCsyet there are many ways in which population growth may be a stimulus to progress, and there are many rational reasons why families in developing countries choose to have many children.
The study concluded that complexity of the subject is compounded by the fact that, economic development is a multidimensional concept. The pace of economic development depends on the diversion of resources from consumption to uses that raise future output.
A population with a high ratio of dependents on producers consumes more of a given output and devotes less to investments. Thus, high fertility, which produces a high level of dependency, promotes consumption at the expense of investment. Simon investigated the long run benefits of population growth.
Whereas population growth has a negative effect on living standards in the short run due to diminishing returns and the temporary burden it poses on society, it has positive effects on living standards in the long run due to knowledge advances and economies of scale. Employing a simulation model, the study found out that in the long run after 30 to years and when compared to constant-size population, moderate population growth improves standards of livings both in more developed and in less developed countries.
In the long run, a growing population tends to advance knowledge, which, in turn, increases productivity and output at a higher rate than that of population growth. Nevertheless, a country's optimal policy regarding population growth depends on the weight given to future periods relative to the present.
The more weight a country gives to future generations and the more willing a country is for the short run decline in standards of livings, the better it is for that country to pursue a policy of moderate population growth. The long run benefits of population growth that links to economic development of poor countries are on the positive balance, contrary to conventional wisdom.
Porter employed a Solow-Swan economic growth model with exogenous saving rates to determine the relationship between population growth and economic growth.
The model assumed that both the saving rate and the consumption rate are given. Taking a household owns the input and manages the technology. The growth rate of population is exogenous. The model further assumes that this growth rate is a constant n and that labour supply per person is given.
Defining a steady state as a situation in which the quantities, such as capital, population, and output, grow at constant rates.
In the Solow-Swan model a steady state exists if the net increase in per capita capital is equal to zero. Denoting steady state values with an asterisk the steady state values are given by: Since the per capita values are constant in steady state the levels of total output, total consumption, and total capital must grow at the same rate, which is the same as that of population growth n.
An increase in the rate of population growth in steady state does not affect the growth rate of the per capita variables, since these rates are equal to zero in steady state. However, an increase in fertility does lead to a decrease in the level of capital per capita and therefore to a decrease in output and consumption per capita. This is the capital dilution effect.
An increase in the population growth rate leads to a decline in the growth rate of the per capita variables. For model with exogenous saving rates higher population growth leads to lower standard of living per capita measured either as consumption or in growth of consumption. The utility of the offspring depends, in turn, on their own consumption and the utility of their offspring. Through this inter-linking chain the current generation consumes and transfers resources to its children influenced by its concern not only for its own children but for all future generations.
An important implication of this model is that familial transfers will neutralize fiscal policy. When a government exercises expansionary fiscal policy it stimulates the economy by increasing current spending financed by issuing debt. From the perspective of intergenerational transfers, the policy is an effort to stimulate spending by transferring resources to current generations from future generations.
According to this model however, the public policy is undone by altruistic households. They compensate future generations by increasing their saving and accumulating wealth, exactly offsetting the increase in public debt. This model implies that public intergenerational transfers and private intergenerational transfers are perfect substitutes.
A change in public transfers is matched dollar for dollar by a compensating change in private transfers. In particular, they identified two distinct mechanisms through which population growth affects labor supply and employment. One is the "accounting" aspect that refers to changes in the demographic structure and cohort size.
The other is the "behavioral" aspect that refers to the decision to participate in the labor force, particularly for women. Fertility, mortality and migration will affect labor supply differently. Mortality and migration will have immediate effects while fertility will have delayed effects. They also pointed out that the structure of the labor market mediates the impact of population growth on employment. For instance, in a neoclassical labor market rapid population growth will instantaneously depress wages.
In a dual labor market where one market modern is behaving like a new classical labor market and another traditional is characterized by surplus labor and low wage rates, rapid population growth will delay the tightening of and eventual dissolution of the low wage traditional labor market or the elimination of the dualistic structure.
In their review of labor markets in developing countries covering the periodthey concluded that despite population increasing rapidly, developing countries managed, on the whole, to improve their economic positions significantly. According to Kelley a lower the pace of population growth will help to enhance economic growth at a higher rate.
The study elaborated that economic growth would be higher in the situation of slower population growth even though the impact of population growth in many countries was insignificant. Population and per capita income are closely associated to depict the picture of economic growth. Lower the population growth and higher the per capita income show that nation achieve their growth targets. Countries with population growth under 1 percent, their per capita income could increase at the rate of 2.
Countries with population growth more than 2 percent had a little increase in per capita income of less than 2 percent. If, however, one considered human capital to be an additional factor of production which is eminently reasonablethen the negative impact of population growth is larger as population growth now forces economies to use their scarce savings to equip young people with physical and human capital.
Bloom and Williamson also found that demographic factors are important determinants of economic growth. Their results show that it is not overall population growth rate that drives economic performance but age distribution.
The age distribution effect operates through the difference in growth rates of the working-age and the dependent population. The study found that population dynamics explain as much as 1.
In Southeast Asia, the estimated effect ranges from 0.
THE IMPACT OF POPULATION CHANGE ON ECONOMIC GROWTH IN KENYA | OMICS International
Bucci investigated whether there is a long-run relationship between population size and growth and per-capita income focusing on human and physical capital as reproducible inputs.
The study found out that population growth exerts a negative effect on economic growth. However, when individuals choose endogenously how much to save, population growth can also have a neutral influence on economic growth. The study also extended its analysis to the case where physical and human capital can interact with each other in the production of new human capital.
When the two types of capital are substitutes for each other in the education sector, the effect of population growth on per-capita income growth is always negative. Instead, if human and physical capital is complementary for each other, the impact of population change on real per-capita income growth becomes ambiguous.
The intuition is the following. For given per-capita physical capital stock, an increase of population causes the aggregate physical capital to rise. If physical and human capital are substitutes for each other in the sense that the larger amount of physical capital now available in the economy deters the demand and, thus, the consequent supply of human capitalthe increase of population size, together with the reduction of the aggregate human capital stock, determines an unambiguous decline of the per-capita level of skills and, via this channel, a lower per-capita income growth rate.
On the other hand, if physical and human capital are complementary for each other the increase in the supply of physical capital spurs the demand and, therefore, the consequent production of new human capitalthe final effect on the per-capita level of skills and, hence, on per-capita income growth of an increase in population may be either positive, or negative, or else equal to zero.
Long-run per-capita income growth can be positive even without any population change; in equilibrium, both the growth rate and the level of per-capita income are independent of population size; the long-run level of per-capita income is proportional to per-capita human capital. The research design reveals the type of data and the method of data collection.
There are two inputs capital and labor which are paid their marginal products. Assuming a Cobb -Douglas production functions the production function at time t is given by: Y is output, K is capital, L is labor and A is the level of technology. The initial levels of capital, labor and level of technology are taken as given. Labor and level of technology grow at constant rates: Applying the result that a variables growth rate equals the rate of change of its log to equation 3. Exponentiating both sides of these equations gives us: The model assumes that a constant fraction of output s is invested.
The central prediction of the Solow model concerns the impact of saving and population growth on real income. Relating theoretical model to the study, an extract from equation 3. When time series data is non stationary and used for analysis it may give spurious results because estimates obtained from such data will possess non constant mean and variance.
Weak Exogeneity concerns the extent to which the parameters of the marginal distribution of the exogenous variable can be ignored when focusing on the conditional distribution of the endogenous variable given the exogenous variable. Should weak Exogeneity not hold, then estimation must account for both the marginal and conditional distributions. If all the variables happen to be weakly exogenous the use of a system of equations and VAR approach in the study would not be justified Oduor, Weak Exogeneity tests were therefore necessary to detect specification errors in the model.
VAR is a method of time series analysis that does assume any structural relationship between the economic variables. The use of structural VAR was justified because of the possibility to simulate the response over time of any variable in a set to either an own disturbance or a disturbance to any other variable in a system of equations Stock and Watson, A structural VAR was used to examine the relationship among a set of economic variables and analyze the dynamic impact of random disturbances on the system off variables in this study.
VAR econometrics analysis entails estimating regression equations in which the current value of each variable is expressed as a function of lagged values of itself and of each of the selected variables. No variable is assumed to be exogenous a priori and no variable is excluded from the autoregressive equation for any of the variables in the system. The paper employed a system of reduced form structural VAR to test for the impact of population growth on economic growth.
The standard estimatable VAR 1 model with the variables in the relationship 3. Granger causality tested the direction of causation between population and economic growth. The causality might be bi-directional and thus there was a need to establish which direction of causality was dominant. In this case failure to account for the reverse causation or feedback between variables is likely to either overstate or understate the contribution of a particular variable.
As many older children are in primary school percentages can be over Poverty breeds high rates of population growth: Families poor in income, employment, and social security need children first to work and later to sustain elderly parents.
Measures to provide an adequate livelihood for poor households, to establish and enforce minimum-age child labour laws, and to provide publicly financed social security will all lower fertility rates. Improved public health and child nutrition programmes that bring down infant mortality rates - so parents do not need 'extra' children as insurance against child death - can also help to reduce fertility levels.
The environment is the business of everybody, development is the business of everybody, life and living is the business of everybody. I think the solution will be found in encouraging mass environmental literacy so that there can be democratic and literate decisions, because if decisions are taken by a few without the incorporation of the opinion of the masses, the NGOs especially included, the likelihood is that the situations will not succeed. They will be imposed from above, the people will not respond positively to them, and the project is lost before it is launched.
All these programmes are effective in bringing down birth rates only when their benefits are shared by the majority. Societies that attempt to spread the benefits of economic growth to a wider segment of the population may do better at lowering birth rates than societies with both faster and higher levels of economic growth but a less even sharing of the benefits of that growth.
Thus developing-country population strategies must deal not only with the population variable as such but also with the underlying social and economic conditions of underdevelopment. They must be multifaceted campaigns: Family planning services in many developing countries suffer by being isolated from other programmes that reduce fertility and even from those that increase motivation to use such services.
They remain separate both in design and implementation from such fertility-related programmes as nutrition, public health, mother and child care, and preschool education that take place in the same area and that are often funded by the same agency. Such services must therefore be integrated with other efforts to improve access to health care and education.
The clinical support needed for most modern contraceptive methods makes family planning services heavily dependent on the health system.
Some governments have successfully combined population programme: This integration increases motivation, improves access, and raises the effectiveness of investments in family planning. Zimbabwe is one nation that has successfully integrated its family planning efforts not only with its rural health services but also with efforts to improve women's abilities to organize group activities and earn money through their own labour.
The government's initial efforts were aimed less at limiting population growth than at assisting women to space births in the interests of mother and child health and at helping infertile women to bear children.
But gradually families have begun to use the contraceptives made available for child spacing as a way to limit fertility. Zimbabwe now leads sub-Saharan Africa in the use of modern contraceptive methods. Managing Distribution and Mobility Population distribution across a country's different regions is influenced by the geographical spread of economic activity and opportunity. Most countries are committed in theory to balancing regional development, but are rarely able to do this in practice.
Governments able to spread employment opportunities throughout their nations and especially through their countrysides will thus limit the rapid and often uncontrolled growth of one or two cities. China's effort to support village-level industries in the countryside is perhaps the most ambitious of this sort of national programme.
Migration from countryside to city is not in itself a bad thing; it is part of the process of economic development and diversification. The issue is not so much the overall rural urban shift but the distribution of urban growth between large metropolitan cities and smaller urban settlements. A commitment to rural development implies more attention to realizing the development potential of all regions, particularly those that are ecologically disadvantaged See Chapter 6.
This would help reduce migration from these areas due to lack of opportunities. But governments should avoid going too far in the opposite direction, encouraging people to cove into sparsely populated areas such as tropical moist forests, where the land may not be able to provide sustainable livelihoods.
Demographic phenomena constitute the heart of the African Development problematique. They are the data that lead most analysts to project a continuing and deepening crisis in Africa.
There is no doubt of the imperative and urgent need for a far reaching population policy to be adopted and vigorously implemented by African governments. One issue of relevance that requires further research is the use of the tax system as a means for controlling population growth and discouraging rural-urban migration. To slow down population growth, should families without children be given a tax incentive or tax break? Should a tax penalty be imposed for each child after a fixed number of children, considering that the tax system has not solved the population migration problem?
From Liability to Asset When a population exceeds the carrying capacity of the available resources, it can become a liability in efforts to improve people's welfare. But talking of population just as numbers glosses over an important point: People are also a creative resource, and this creativity is an asset societies must tap.
To nurture and enhance that asset, people's physical well-being must be improved through better nutrition, health care, and so on.
And education must be provided to help them become more capable and creative, skilful, productive, and better able to deal with day-to-day problems. All this has to be achieved through access to and participation in the processes of sustainable development. I noticed that you have tried to separate religion from the technological side of life.