The Relationship between Population Growth and Economic Development

The Relationship between Population Growth and Economic Development

Abstract

Population growth and economic development are two variables that exhibit a twofold relationship since the dynamics experienced in each one of them is capable of affecting the other. This research tries to find out whether population growth affects economic growth and also whether economic growth facilitates populations growth. The research narrows don to establish whether population growth leads to or affect the development of urban centres, which could be categorized as part of economic development. The setting of the research will be in the United States of America. Although, research will be based in the United States of America, it will utilize findings and literature from other studies that were conducted in different regions but with a common goal of establishing the relationship between population growth and economic development. The structure of the research will include an introduction, background review or literature review, results or findings, and conclusion sections. After the initial research is complete and data is collected, a qualitative methodology will be used to analyze the data to provide viable and reliable results.

Key Words include population growth, economic growth, development of urban centers, urban expansion ration, urban change, and land use pattern.

Introduction

The relationship that is exhibited between population growth and economic development or growth has triggered the emergence of a significant interest both for researchers, development economist as well as demographers. Both population growth and economic growth exhibit a twofold connection or relationship since they are capable of triggering each other. In this regard, it has been established that population growth, high birth rates, and low mortality rates boost economic development. When the mortality rate is low and the population growth rate is high, the high population not only constitute a large market for various businesses but also have sufficient time to take risks and innovate as they actively engage in various economic activities to improve their living standards. On the other hand, economic drivers, such as favorable business taxes, low unemployment rates, and low inflation rates promote population growth. This is because low unemployment and inflation rates enable citizens to have enough money to spend on essential commodities, including food, housing, education, and health care. When people have jobs and money in their pockets, they can procreate and adequately take care of themselves and their children (Stockwell, 2015). This is because significant economic development leads to reduction of unemployment rates and also reduces occurrences of inflation, an aspect which enables citizens in a the economically stable country to have enough money to spend on essential commodities, including food, housing, education, and health care. Ideally, economic prosperity means the people have enough resources, including equipped health-care facilities, which enables them to reduce their death rate and remain healthy. Generally, in this broad research topic, it is evident that population growth leads to economic growth. Similarly, the economic growth facilitates populations growth. The research utilized various pieces of literature provided by different researchers that were systematically reviewed and a qualitative analysis of their findings was conducted to conclude regarding the relationship between population growth and economic development. The research is intended to bring out the binary link between economic breakthrough and population growth. However, since the topic is broad, the researcher narrowed down and conducted a research on one of the ways in which population growth may affect economic development, that is, determining how population growth affects the development of urban centers in the United States of America. By answering the question “how population growth affects the development of urban centers?” the researcher was able to establish a more precise relationship between population growth and economic development.

Background Review/ Literature Review

The aspect of extensive land cover results from population growth. This aspect leads to land use transformations where individuals engage in various economic factors leading to development of central economic centers referred to as urban areas or cities. Urbanization or the growth of urban centers, which is part of economic development that occurs when people from different parts of a country or the entire globe move from rural areas to towns or cities resulting to growth in the size of the urban population, which significantly influences the extent of urban centers (Stockwell, 2015). When the population increases in a particular city, the urban center responds by expanding in order to accommodate comfortably, the growing population. The expansion of urban centers is influenced by the increased need of housing facilities, social amenities, market increase and commodity demand pressures, high demand of recreational facilities and other needs that are triggered by the vigorously growing population. On the other hand, urbanization leads various factors that affects population growth. For instance, urbanization or development of urban centers in the united states has led to creation of more employment opportunities, which have consequently led to low unemployment rates and also favorable business taxes due to low inflation. Therefore, when individuals have jobs and sufficient money in their pockets, they can procreate and adequately take care of themselves and their children, which promotes population growth. The relationship occurs since the low unemployment and inflation rates resulting from urbanization enable people in the United States to have enough money to spend on essential commodities, including food, housing, education, and health care leading to population growth. Consequently, the creation of jobs and other favorable facilities in the urban centers attracts members of the growing population to migrate to the cities leading to development of urban centers. This part will discuss some of the studies and literature that has been established by various scholars regarding the relationship between population growth and one of the economic developments, which is urban centers growth.

The significant role played by economic demographics in economic development could be described as one of the oldest topics or themes in economics, an aspect that can be attributed to Thomas Malthus, one of the ancient researchers who conducted a research on the principle of population in 1798. According to Malthus, economists can be classified into three categories regarding their arguments about the relationship that exists between population growth and economic growth and more specifically development of urban centers (Rahman, 2018). In his criteria of classification, he stipulated that one category of economists argue that population growth and economic growth exhibit a positive relationship where population increase leads to economic growth and achievement of development. The second category, according to Malthus findings, argues that the power of population growth is indefinitely greater than the power to produce subsistence for man on earth. This means that population growth has a positive influence on the economic development whereas economic development has a negative impact on population growth (Rahman, 2018). In addition, Malthus research stipulated that the third category of economists argue that population growth has no significant effect on economic growth and vice versa. Malthus’s research and his findings created a need to conduct extensive investigation regarding the relationship between population growth and economic growth.

In another study that was conducted by Coale and Hoover in 2015, they based their research on the neoclassical growth approach, a theory that was established by Robert Solow. This is an economic model or theory that stipulates that economic growth and more specifically growth of urban centers or urbanization is contributed by three factors that include labor, technology and capital. According to the findings of the research, they established that population growth has positive impacts on the economy and economic growth since when the population grows labor will be available which will consequently steer economic growth (Coale & Hoover, 2015). They also argued that population growth and technological developments or advancements are correlated, which are essential elements for economic development. Their research highlighted that population growth affects growth of cities since they argued that high population provide a massive labor force, which leads to successful operation of business activities leading to urbanization.

In another study that was conducted by Ali et al., (2013), the researchers utilized the Autoregressive Distributed Lag (ARLD) approach to determine the relationship that exists between population growth and economic development. After the research which was based in Pakistan which took a time series data from 1975 to 2008, the results indicated a positive relationship between population growth and economic development. Similar results were obtained from a research that was conducted by Adewole, (2012) in Nigeria. However, these studies indicated that the managing the problems associated with large populations was a challenge that affected the relationship in the short run.

Results/ Findings

After conducting the research on the variables of study and applying the qualitative analysis approach to analyze data, the following results were attained. The researcher established that in the short run, population growth portrays a positive relationship with economic development especially urban center development whereas economic growth exhibits a negative relationship or effect on population growth since there is a challenge in providing facilities and job opportunities to the newly supplied labor force as a result of population growth. However, the researcher established that in the long run, population growth has a positive relationship with the economic growth since expansion of urban centers as a result of population growth leads to increase in per capita GDP and on the other hand per capita GDP positively influences population growth. This revealed the existence of a mutually underpinning relationship between the two variables of population growth and economic development in United States of America.

Conclusion

In conclusion, the study was aimed at establishing the relationship between population growth and economic development or growth. The after the accomplishment of the study, the researcher was able to answer how population growth affects the development of urban centers in the United States of America. The study concluded that most cities in the U.S have experienced significant development or expansion due to rapid increase in population. The study established that the urban centers have experienced a steady development since 1960 with almost a similar land consumption ratio. Therefore, population growth affects urban centers development positively and consequently affects economic growth in a positive in the long run since it is connected with labor which is a major factor of production. In sum, the outcomes in this study portray the existence of a bi-directional causality between economic development and population growth in U.S.A.

References

Coale, A. J., & Hoover, E. M. (2015). Population growth and economic development. Princeton University Press.

Rahman, M. (2018). Validity of Malthusian Theory of Population in 20th Century in Terms of Using Scientific Technology to the Economic Growth and Strength.

Adewole, A. O. (2012). Effect of population on economic development in Nigeria: A quantitative assessment. International Journal of Physical and Social Sciences, 2(5), 1-14.

Stockwell, E. G. (2015). The relationship between population growth and economic development. American Sociological Review, 27(2), 250-252.

Ali, S., Ali, A., & Amin, A. (2013). The impact of population growth on economic development in Pakistan. Middle-East Journal of Scientific Research, 18(4), 483-491.