03 Population and economic growth

Question 1

World population since 10.000 BC

Answer 1

Question 2

World population (1950-2050)

Answer 2

Question 3

Malthus’ theory

Answer 3

y > y^ss → population growth −→ y↓

y < y^ss → population falls −→ y↑

Question 4

Productivity improvement in Malthus’ theory

Answer 4

• More resources → Higher y → Population growth → y↓.
• Hence no improvement in living standards, only population growth.
• Consistent with the data until early 1800s.

Question 5

In Malthus’ theory, only ____ will increase GDP/capita

Answer 5

In Malthus’ theory, only lower fertility will increase GDP/capita

Question 6

Malthus’ theory vs data in the last two centuries

Answer 6

Predictions from theory:

• GDP/capita constant in the long run.
• More food, land etc available (productivity growth) −→ population growth.

Data:

• Enormous productivity improvements, followed by
  
  • Low population growth in rich countries
  • Increase in living standards.

Question 7

What’s wrong with Malthus’ model?

Answer 7

Resources (capital, land, crops etc) are fixed.

• Resource limitations such as land less important today.
• Human capital and ideas can be shared irrespective of population size.

Assumptions about population growth.

Question 8

Does population size not matter for living standards anymore?

Answer 8

Yes, there are sill some fixed factors (environment, food?)

Question 9

Population growth in the Solow model

Answer 9

Higher n → Steeper slope of (n+δ)k → SS k ↓ and y ↓.
Intuition: Less capital/worker → lower productivity.
Growth in Y, but not y.

Question 10

Population in Malthus vs. Solow

Answer 10

Both models can explain negative correlation between population growth & income. But mechanism differs:

• Population vs land (Malthus) vs Population vs capital (Solow)
• Endogenous population (Malthus) vs exogenous population (Solow).

Question 11

Life expectancy at birth (1750-2000)

Answer 11

Question 12

Main transitions in population growth

Answer 12

Mortality and fertility transition

Question 13

Explaining mortality transition

Answer 13

• Better living conditions (nutrition, housing).
• Public health (water and sewage).
• Medical treatments.
• Infant mortality

Question 14

Definition of TFR

Answer 14

Total fertility rate

Question 15

Total fertility rate in the US (1860-2010)

Answer 15

Question 16

Explaining fertility transition

Answer 16

• Improved technology (contraception).
  
  • Contraceptive pill (1960-)
  • Quality condoms (1840s-).
• Family planning attitudes & programs.
  
  • One-child policies.
• Mortality reduction → lower fertility bc # surviving children matters.
• Income and substitution effects.
  
  • 􏰀Income effect: Get more children.
  • 􏰀Substitution effect: Get less children because the opportunity cost is higher.
  • 􏰀Opportunity cost even higher if women become more educated and earn more.
• Resource flows between parents and children.
  
  • 􏰀Decline of child labor.
  • 􏰀Social Security.
• Quality-quantity trade-offs.
  
  • 􏰀More investment in quality of child vs quantity.
  • 􏰀Because of higher life expectancy?

Question 17

Desired and actual fertility, 1970s and 80s

Answer 17

Maybe contraception doesn’t play a large role?

Question 18

NRR

Answer 18

Define net rate of reproduction (NRR) as the number of daughters that each girl who is born can be expected to give birth to.

Assuming fertility and mortality rate of current population:

NRR = β ∑ π(i) F(i)

where β is the share of female newborns.

Zero population growth if NRR = 1.

Question 19

Total Fertility Rate and Life Expectancy at Birth in Sweden (1750-2000)

Answer 19