0455 · 5.3Population

Population change measures

0:00Two countries can have equally large populations and very different economic needs. One may need more schools, while the other needs more pension payments and healthcare. The number of people matters, but their ages and circumstances matter too. We will explain what changes population size and how those changes affect an economy. Population means the total number of people living in an area. They consume goods and services, and many also contribute to production through work.

0:25A country has limited resources, such as land, equipment and workers’ skills. The economic consequences of population change depend on how those resources develop alongside the number of residents. There are three factors that affect population growth: births, deaths and net migration. Births add people, while deaths reduce the total. Movement across national borders can increase or decrease the number of people. Keeping these components separate helps us explain why countries experience different patterns of population change.

0:56Birth rate is the number of live births per thousand people per year. Deaths are measured on the same base, so the death rate is the number of deaths per thousand people per year. Using a common population base makes comparisons between countries more useful. A larger country can record more births simply because it has more people. Immigration is people moving into a country to settle there. Emigration is the opposite: residents moving out to settle elsewhere.

1:22Net migration is immigration minus emigration. A positive result adds residents because arrivals exceed departures. When more people leave than arrive, the result is negative and reduces population size. Natural increase is the excess of births over deaths. Its rate equals birth rate minus death rate, with both measured per thousand people per year. Overall population change equals births minus deaths plus net migration. To combine these components correctly, use either numbers of people throughout or rates with the same population base.

Calculating population growth

1:55Suppose a country has one million people, with a birth rate of twenty-four and a death rate of nine per thousand that year. Births equal twenty-four divided by one thousand, multiplied by one million, which is twenty-four thousand people. The same method for deaths gives nine divided by one thousand, multiplied by one million, or nine thousand people. Subtracting nine thousand from twenty-four thousand gives a natural increase of fifteen thousand people.

2:20In the same year, six thousand people move into the country and two thousand move out. Subtracting two thousand from six thousand gives positive net migration of four thousand people. Adding this to the natural increase of fifteen thousand gives an overall population increase of nineteen thousand people. The percentage growth rate equals the population increase divided by the starting population, multiplied by one hundred. Nineteen thousand divided by one million, multiplied by one hundred, gives one point nine per cent.

2:48As a rate, that is nineteen per thousand. It combines a natural increase of fifteen per thousand with net migration of four per thousand.

Causes of population change

2:57These rates can differ widely between countries, and net migration can be positive in one country and negative in another. In general, low-income countries have higher birth rates than high-income countries. Death rates have fallen in most countries as healthcare improved. They stay higher where conflict or poor sanitation continues. Birth rates vary between countries because family decisions respond to economic and social conditions. Where children help on farms or earn income, larger families may provide financial support.

3:26Parents without reliable pensions may also expect their children to support them in old age. These circumstances can encourage more births. Greater access to education for women can expand employment opportunities and encourage later parenthood. Raising children also involves spending and time away from paid work. Reliable contraception allows families to choose the timing and number of births. As these conditions change, birth rates often fall. Religion and culture can influence preferred family size and attitudes towards contraception.

3:56Higher incomes may make children more affordable, but they can also increase the earnings parents sacrifice during childcare. Improved child survival can reduce the number of births parents feel they need. A country’s birth rate therefore reflects several influences working together. Death rates also differ because living conditions affect survival. Accessible healthcare can prevent disease and treat illness before it becomes fatal. Clean water and effective sanitation reduce the spread of infections.

4:24Adequate income helps households afford nutritious food and safe housing, which can further reduce deaths. Conflict can raise death rates through violence, damaged hospitals and interrupted food supplies. Age structure matters as well because deaths are generally more frequent among older people. A country with excellent healthcare can still have a relatively high death rate if many of its people are elderly. Interpret the figure alongside the population’s age distribution.

4:51Job opportunities are a major reason why net migration varies between countries. Higher expected earnings and available employment can attract arrivals. Conflict or insecurity may push people to leave, while safer countries receive them. Family connections, education opportunities and immigration rules also influence where people choose to go.

Optimum population and economic effects

5:10Gross Domestic Product, or G D P, is the total value of output produced in a country. Real G D P measures that output at constant prices. An optimum population is the population size at which real G D P per head is at its maximum, given the country’s resources. Per head means divided by the population. With too few people, useful resources may remain underused. Additional workers could cultivate unused land or operate equipment more effectively.

5:37Businesses may also gain enough customers to support specialised services. Such a country is under-populated, so extra people raise real G D P per head. Above the optimum, the country is over-populated, and each extra person adds pressure on the available resources. Crowded farmland or insufficient equipment can limit how much each worker produces. Total real G D P may still rise, while the amount per head falls. Better technology, improved skills or additional equipment can move the optimum to a larger population size.

6:08An increase in population creates more potential consumers. Stronger demand may encourage firms to expand and offer jobs. If the newcomers have suitable skills, employers also gain a larger pool of workers. These benefits are strongest when investment and employment opportunities develop alongside the population. Rapid growth can put pressure on housing, transport, schools and hospitals. Governments may need extra spending before the newcomers can contribute much tax revenue. Where jobs expand slowly, more people may struggle to find work.

6:39Greater use of land, water and energy can also damage the environment unless resources are managed sustainably. A decrease in population can ease congestion and reduce pressure on housing or natural resources. Those who remain may have more resources available per person. However, fewer customers can reduce firms’ sales and discourage expansion. A shrinking workforce may also leave employers short of workers and reduce government tax revenue. The cause of a population change shapes its economic effects.

7:09New births initially increase the need for childcare and education. Arrivals of working-age adults can contribute to production much sooner. A fall caused by departing workers has different consequences from one caused mainly by fewer births.

Population structure and dependency

7:23A population pyramid shows the age and gender distribution of a population. Age groups run upwards, with younger people at the bottom and older groups at the top. Conventionally, male bars extend left and female bars extend right. The width of each bar shows that group’s share of the population. In a youthful developing country, high birth rates give the pyramid a broad base of children. A narrow top shows relatively few older people, because fewer people reach old age.

7:49This pattern creates immediate demand for schools and future demand for jobs. Countries differ, so development level alone cannot tell us the exact shape. Low birth rates and longer lives give an ageing developed country a different shape. Its base is narrower, and its upper section is relatively wide. Employers may then face fewer new entrants to the workforce. Healthcare and pension spending can rise as more people reach retirement.

8:14The dependency ratio compares children and older people with the working-age population. It indicates the potential support burden on those of working age. A youthful population creates education costs, while an ageing one increases pressure on pensions and healthcare. Actual support needs also reflect employment, since some older people work and some working-age adults do not. With fewer workers supporting more pensioners, governments may need higher taxes or changes to spending.

8:42Older people can contribute valuable experience if they remain employed. Their purchases also create demand for services such as healthcare and accessible transport. The economic outcome reflects both support needs and opportunities to contribute. Gender distribution is the balance between males and females in each age group. When far more men than women emigrate for work, a gender imbalance appears among working-age adults. Fewer couples may then form, so future birth rates can fall.

9:08If one gender has less access to education and paid work, the economy loses part of the output it could produce. Equal opportunities let employers use the skills of every group.

Exam skills and recap

9:19Examiners often see units mixed up and the two parts of population growth confused. Birth and death rates are always stated per thousand people per year. Population growth is natural increase plus net migration, not either one alone. A good judgement of population effects looks at real G D P per head, jobs and the age groups that are changing. In multiple choice, check whether the figures describe totals, rates or population shares before choosing an answer.

9:46For define, give the precise meaning; state asks you to express an answer in clear terms. Explain requires reasons and the steps linking cause to outcome. Analyse examines relationships in detail, while discuss needs a structured examination of both sides. Consider the instruction to explain why improved sanitation may reduce a country’s death rate. Improved sanitation, such as safe sewage disposal, cuts contamination of drinking water. Fewer people catch waterborne diseases.

10:15This reduces fatal infections, so the number of deaths per thousand people per year falls. A discuss question might ask whether an increase in population will benefit an economy. Extra working-age adults can fill vacancies and increase production. More customers can encourage firms to expand. Where existing resources were underused, these changes raise real G D P per head and benefit the economy. However, rapid growth can overcrowd schools and hospitals when investment is insufficient.

10:43A shortage of suitable jobs leaves additional workers without earnings, so real G D P per head falls. On balance, an increase in population will usually benefit an economy when jobs, investment and public services expand with it. Under those conditions, extra people raise real G D P per head while essential services remain accessible. Population growth combines natural increase with net migration, using compatible units. Differences between countries reflect healthcare, family choices, income, culture and opportunities to move.

11:15The optimum population maximises real G D P per head for the resources available. Age and gender distribution help explain who can contribute to production and which services people need.