Perspective

Population Growth and Indian Journal of Human Development

15(3) 486–502, 2021
Economic Development: © 2021 Institute for
Human Development
Theoretical Arguments Reprints and permissions:
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and Empirical Findings— DOI: 10.1177/09737030211062105
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A Survey of Literature

Ajit Kumar Singh1

Abstract
The relationship between population growth and economic development has remained a controversial
topic since the time of Malthus. Opinion among the scholars on this issue is sharply divided. This article
examines the theoretical arguments about the likely consequences—positive or negative—of higher
population growth on economic development and looks at the empirical findings on the issue based on
the survey of literature in the field. The article traces the historical profile of demographic change in
the developed and the developing countries over the last two centuries and analyses the factors behind
them with particular reference to China and India. The implications of the findings for population
control policy are also examined. There is a growing realisation of the fact that fertility decline is
dependent upon socio-economic development. There is a general consensus among demographers that
policies for fertility reduction should stress voluntary decisions on the part of the individuals concerned
rather than compulsion and should be conceived in the context of a much wider programme for
social, economic, and political development. The positive and negative incentives in this situation have
a limited role to play in this context.

Keywords
Demographic transition, mortality and fertility decline, impact of population growth on economic
development, technological change and resource constraints, population policy

Introduction
The relationship between population growth and economic development has remained a controversial
topic since the time of Malthus, who argued that population growth has a tendency to outstrip growth of
food unless it is restrained either by the preventive check of controlling reproduction or by resource

1
Former Director, Giri Institute of Development Studies, Lucknow, Uttar Pradesh, India

Corresponding author:
Ajit Kumar Singh, Former Director, Giri Institute of Development Studies, Lucknow, Uttar Pradesh 226024, India.
E-mail: [email protected]
Singh 487

shortages resulting in positive checks such as famine, disease and war. In the mind of common man, the
growing population is the cause of slow growth and rising poverty in the country. Opinion among the
scholars on this issue is sharply divided. While some believe that population growth has a negative
impact on economic development measured by growth of total or per capita income, others argue that
population can has a positive impact on economic growth. Still others think that there is little impact of
population growth on economic development. Strong theoretical arguments are advanced in favour of
each of the viewpoint and statistical support is garnered to support their viewpoint.
The aim of this article is to examine the theoretical arguments about the likely consequences—positive
or negative—of higher population growth on economic development and to look at the empirical findings
on the issue based on the survey of literature in the field. The article also discusses the implications of
these findings for population policy. The article is divided into five sections as follows including
introduction. The second section deals with the historical profile of demographic change in the developed
and the developing countries. The third section deals with the theoretical arguments about the impact of
population growth on economic development. The fourth section deals with the empirical findings about
population growth and economic development with particular focus on China and India. Finally, we
examine the question of the role of population policy in reducing fertility and promoting growth in the
fifth section. The last section summaries the main findings.

The Historical Profile of Demographic Change

The Developed Countries

From the beginning of history until the beginning of the eighteenth century the world population
witnessed a very slow increase as both birth rates and death rates were extremely high. The world
population was estimated to be around 1 billion in 1800. Since then, world population entered into a
phase of accelerated growth reaching the figure of 7.9 billion in 2020. The demographic transition began
around 1800 with declining mortality in Europe. It has now spread to all parts of the world and is
projected to be completed by 2100 (Lee, 2003, p. 167). The demographic transition starts with mortality
decline, followed after a time by reduced fertility. These trends first lead to increased population growth.
Later on, when fertility decline catches up with mortality decline population growth slows down.
The demographic transition in Europe began with a decline in mortality in the nineteenth century.
Several factors contributed to the decline in mortality including reductions in contagious and infectious
diseases, the development of the smallpox vaccine in the late eighteenth century, public health measures
adopted towards the late nineteenth century, improved personal hygiene, improved nutrition following
rise in incomes, and so on (Lee, 2003, pp. 170–171). Improvement in literacy and national income also
contributed to decline in death rate and increase in life expectancy possibly due to better hygiene and
nutrition. A study by Preston, for instance, shows that a 10 percentage point increase in literacy is
associated with a gain in life expectancy of approximately 2 years, and that a 10% gain in national
income by itself increases life expectancy by approximately one-half year (Preston, 1980, p. 206).
Fertility decline started much later around 1870 and took place at a slower pace as compared to
mortality decline. Several factors led to the decline in fertility in European countries. Socio-economic
development played an important role in fertility decline (Cassen 1976). The rise in per capita income
and living conditions was a major contributor (Sinding, 2009). The Expert Group Report of National
Research Council reports concludes ‘that there is a causal relationship running from improved living
standards to lower fertility is no longer in much dispute’ (National Research Council, 1986).
488 Indian Journal of Human Development 15(3)

The reduction of infant and child mortality is a pre-condition of fertility decline as it ensures that at
least some of the children will survive. According to Cassen,

[o]ne of the most important factors in fertility decline is mortality itself. It is not babies that parents want,
so the argument runs, but surviving offspring. One would therefore expect fertility to be unlikely to decline
where mortality is high, especially infant and child mortality. The expectation is supported by many findings
of demographic history-typically the national decline of fertility was preceded by declining mortality, with a
considerable lag between the two. (Cassen, 1976, p. 788)

Studies also show that fertility decline is associated with higher levels of education. Rosenzweig, for
examples, shows that ‘alterations in the returns to human capital associated with exogenous technological
change lead simultaneously to increases in schooling investments and to significant reductions in fertility
in the absence of family planning interventions’ (Rosenzweig, 1990, p. S68). Cross section studies across
countries and within the country show that improvement in education level of parents, particularly
mothers, is negatively correlated with fertility (Cassen, 1976, p. 790). As he points out, ‘education brings
about a change in the attitudes and behaviour of parents, increases the aspirations of the parents, improves
capacity of women to make deliberate choices about the size of the family and the use of contraceptive
methods’ (Cassen, 1976, p. 790).
Fertility is also found to be associated with urbanisation. Urbanisation is related to a distinct lifestyle
and sociocultural environment. As Cassen points out the following:

Perhaps the distinctive features of urban life are those of life-style at work and at home, in which children
may be a greater encumbrance; greater female emancipation and employment; the prevalence of ‘modern’
attitudes, especially towards family planning; and the greater availability of family planning services. (Cassen,
1976, p. 795)

Similarly, Reher points out the following:

At the same time the demographic transition was taking place, Europe, and West at large, were undergoing a massive
process of social and economic transformation. Living standards and educational levels were rising, society was
becoming increasingly urban, the industrial and services sectors of the economy were surpassing agriculture both
in production and in social relevance, time off was becoming an expected compensation for jobs, consumer society
was beginning to emerge, and women were about to the enter labor market en masse. (Reher, 2011, p. 11)

Similarly, Lee also points out the following:

These socio-economic developments in Europe during the eighteenth and the nineteenth centuries had several
effects: children become more expensive, their economic contributions diminished by school time and the
opportunity costs of childrearing increased. All these factors led the parents to restrict the size of the family.
The parents preferred quality of children over their numbers and choose to devote more resources to each child,
which led to birth of fewer children. (Lee, 2003, p. 174)

It is also noteworthy that in the European countries fertility decline followed improvement in per capita
income and education much before the modern family planning methods were available. Coitus
interruptus was the main method followed by parents who wanted to restrain the size of their family
(Lee, 2003).
The decline in fertility, in its turn, has important socio-economic consequences. As Sinding argues:
‘Decline of fertility has a series of long run family welfare outcomes: women’s health, earnings and
household assets, use of preventive health inputs, and finally the inter-generational effects on the health
Singh 489

and schooling of the woman’s children’ (Sinding, 2009). This is supported by many micro studies. A
study by Joshi and Schultz revealed that in Bangladesh, fertility decline was found associated with
improvements in women’s health, household earnings and assets, use of preventive health inputs, and
children’s health and schooling (Joshi & Schultz, 2007).
The fertility transition continued in the developed countries in the post Second World War. As a result,
fertility fell far below replacement level in many industrial nations (Van de Kaa, 1987). The population
aging leads to increase in dependency ratio and puts additional burden on the finances of the government
to provide for social security and medical treatment of the old. The problem is more serious in the developed
countries who have completed the process of demographic transition. The developed countries as well as
some developing countries in Latin America have committed large funds for the care of the old. It is feared
that these transfer in favour of the old may not be sustainable in the long run (Lee & Mason, 2011).

The Developing Countries

The demographic transition started much later in the developing countries sometime in the twentieth
century (United Nations, 1973). The United Nations Population Division estimates that CDRs in LDCs
were 38/1,000 in 1850–1900 and 17/1,000 in 1960–1970, whereas CBRs were 40/1,000 and 41/1,000 in
the two periods (United Nations, 1971, p. 7). Thus, while CDR declined by more than 50% over the
period, fertility rates remained almost the same leading to the problem of ‘population explosion’. As
Preston (1980) points out ‘the decadal rate of mortality decline in many LDCs surpasses that ever
observed in populations of the now-developed world’.
There is, however, considerable difference of opinion among experts as to the causes of mortality
decline in the developing countries. According to Preston,

[t]here is much more consensus on the fact of mortality decline in LDCs than on its causes. Considerable dispute
remains about whether the decline has been principally a by-product of social and economic development as
reflected in private standards of nutrition, housing, clothing, transportation, water supply, medical care, and so on
or whether it was primarily produced by social policy measures with an unprecedented scope or efficacy. A third
possibility is that technical changes reduced the relative costs of good health. (Preston 1980, p. 290)

According to Cassen, ‘[t]here are three main sources of mortality decline in 20th century developing
country experience: (a) the reduction of famines and major epidemic disease; (b) the control of endemic
disease; (c) the gradual improvement of general conditions of living and health’ (Cassen, 1976, p. 800).
The fertility transition in Less Developed Countries began much later around the mid-1960s. Fertility
decline was very rapid in east Asia (Casterline, 2001), but the pace of decline was slower in most of the
countries. Fertility decline is still in progress in the developing countries.
Reher points out three distinguishing features of the dynamics of the demographic change in the
developing countries: ‘(a) the pretransition vital rates tended to be higher; (b) the pace of decline of vital
rates was considerably faster than in the historic transition; (c) population growth rates far surpassed
those reached during the first transition’ (Reher, 2011, p. 13).
In general parents prefer a large family in the developing countries due to a number of factors. As
pointed out by Demeny (2011) additions to the population are the result of a multitude of individual
decisions concerning childbearing. The parents calculate the private costs and benefits of children to
them while deciding about birth of a new child. Demery refers to four components of incentive structure:

In the experience of past fertility transitions, four components of the incentive structure seemed especially
pertinent in determining the prospects of fertility change in the developing world: the direct costs parents must
incur in bringing up children; the opportunity costs of children to parents, that is, the earnings a couple (and
490 Indian Journal of Human Development 15(3)

especially the wife) must forgo because of children; the contribution of children to family income through labor
services; and the contributions of children to parents’ economic security in old age, in comparison to alternative
sources of security. (Demeny, 2011, p. 259)

According to him fertility declines when shifts in these components make family limitation advantageous
to couples, overcoming cultural resistance supporting traditional behaviour.
According to Cassen,

[t]here is a widespread belief that an important reason for the prevalence of the large family in developing
countries is the economic advantage it brings to parents. Children may be economically useful during the parents’
working life, contributing to the family income and taking on parental tasks in times of sickness or injury, and
may support parents when the latter are too old to work. (Cassen, 1976, p. 792)

Impact of Population Growth on Economic Development:

Theoretical Arguments
The question whether the impact of population growth on economic development is positive or negative
has remained a topic of intense debate for a long time. Very powerful arguments in favour of each view
have been advanced. The empirical evidence has been marshalled to support the theoretical reasoning.
We briefly review this controversy in this section.
For a long period spanning over the nineteenth and the early twentieth centuries, people believed in
the Malthusian forebodings about the impact of population growth on economic well-being of the people.
However, after the Second World War the opinion among scholars has been shifting from one viewpoint
to another. Sinding, for instance, distinguishes between three broad stages of thinking on the relationship
between rapid population growth and economic performance in the post second world war period
(Sinding, 2009, p. 3024). In the first stage during the sixties and the seventies which witnessed rapid
population growth in the developing countries, scholars such as Coale and Hoover (1958), Myrdal
(1968) and Enke (1970) took the neo-Malthusian position and believed that rapid population growth had
to be brought under control to achieve higher economic growth. The second stage starts in the mid-
eighties, which has been called the ‘revisionist’ period by Kelley (1988). The thinking in this period was
influenced by the report of the US National Research Council (1986) on Population Growth and
Economic Development: Policy Questions. The report concluded that ‘rapid population growth can slow
development, but only under specific circumstances and generally with limited or weak effects’. In the
third and the current phase scholars like Bloom and Canning (2006) argued that rapid population growth
opened a window of opportunity as the fall in fertility resulted in shift in the age structure of population
in favour of the economically active population in the age group of 15–65 leading to a decline in
dependent-worker ratio. This demographic bonus leads to increased economic output and higher per
capita income (Sinding, 2009, p. 3024).

Arguments in Favour of Positive Impact of Population Growth

Those who consider population growth as a positive factor in development emphasise its impact on
technological change, economies of scale, quality of labour force, migration, standard of living, women’s
work, capital formation and changes in age structure. The role of these factors is discussed briefly below.
Technological Change: Kuznets was the first economist to argue that population growth may have a
positive effect on technological innovation. In his view if the proportion of geniuses in a population is
constant, the larger the population the larger the number of geniuses in a society (Kuznets, 1960).
Singh 491

Boserup (1965) was another reputed economist who argued that rising population tends to induce
agricultural innovation and lead to agricultural intensification, allowing greater productivity per unit of
land to feed the larger population. Easterlin also believes that technological innovation on a widespread
and continuous scale coupled with quality of labour has contributed to productivity growth (Easterlin,
1967). Technological progress also enables a country to reduce the pressure on the natural resources by
improving resource use efficiency and finding substitutes for raw materials (Galor & Weil, 2000).
The pace of technological change accelerates with time. This has been well illustrated by Galor and
Weil in the following words:

The relationship between population growth and income growth changes as economies mature. The economy
evolves from a Malthusian regime, where technological progress is slow and population growth prevents any
sustained rise in income per capita, into a Post-Malthusian regime, where technological progress rises and
population growth absorbs only part of output growth. Ultimately … the economy enters a Modern Growth
regime with reduced population growth and sustained income growth. (Galor & Weil, 2000, p. 806)

Economies of scale: It is often argued that larger population helps in creating economies of scale and
specialisation (Easterlin, 1967). Glover and Simon (1975) and Boserup (1981) have argued that higher
population densities can increase the economies of scale in providing productivity-enhancing
infrastructure and services such as transport and extension services.

Quality of Labour Force: Improvement in the quality of labour with rising population is often mentioned
as an important factor leading to higher output per capita. The reduction in fertility rate enables parents
to provide better nutrition and health care and spend more on education of their children. The younger
population is expected to be more educated with positive attitudes towards work and hence more
productive than the old workers whom it replaces. As a result, the quality of labour force improves
leading to higher productivity and longer working life (Cassen, 1976; Easterlin, 1967; Lee & Reher,
2011; Rosenzweig, 1990).

Migration: The increasing population pressure especially in the densely populated areas encourages
international as well as inter-regional and rural to urban migration (Lee & Reher, 2011). During the
economic development of the European countries in the nineteenth-century large-scale migration to new
countries like USA and Australia took place. Migration has many positive effects. It reduces the pressure
in the labour market and helps the local population through remittances. Internal migration also leads to
higher urbanisation and growth of large cities which have positive effect on economic activity.

Standard of Living and Women’s Work: Among the more important consequences of reduced fertility is
the improvement in the standard of living as the family size reduces and income is shared by a fewer
people. Reduction in the number of children also frees women from the heavy burden of child rearing
and enables them to join the work force. This not only increases household income but also contributes
to growth of national income.

Capital Formation: It has been argued by some scholars that the larger size of family following mortality
decline may exert pressure on the parents to increase family income. Easterlin, for example, has argued
that population pressure arising from mortality reduction may provide the spur to work harder, search out
information, increase capital formation, and try new methods (Easterlin, 1967, p. 104). Colin Clark
(1965) and Ester Boserup (1965) believed that higher population pressure would encourage adoption of
new and more productive technology.
492 Indian Journal of Human Development 15(3)

Age Structure: More recently many scholars have pointed out to the positive impact of changes in the age
structure of population. The demographic changes bring about a shift in the age structure in favour of the
working-age population and reduces the dependency ratio, thereby contributing to higher savings and
output. However, as recent literature points out at later stages demographic changes lead to increase in
the proportion of old age people and increases the dependency ratio thereby ending the population
dividend (Lee & Reher, 2011; Sinding, 2009).

Arguments about Negative Effects of Population Growth

Those who believe that population growth adversely affects economic growth lay stress on factors like
increasing pressure on land, diversion of savings to higher consumption, increasing dependency ratio,
and so on. Coale and Hoover (1958) are the leading proponents of this view. According to them the
increasing size of population and higher dependency ratio of children tend to
divert national resources away from investment in expanding production and increasing the capital/
labor ratio to meet the growing needs for schools, health, housing, and other infrastructure needed to
avoid compromising the future population’s wellbeing and productivity. Similarly at the household level,
they divert resources away from saving for productive investment, to meet current consumption needs.
(Coale & Hoover, 1958)
Such views are often repeated in the context of the developing countries facing rapid population
growth. Easterlin summaries these views as follows:

In sum, the present conditions of rapid population growth in less developed nations are seen as creating pressures
on limited natural resources, as reducing private and public capital formation, and diverting additions to capital
resources to merely maintaining rather than increasing the stock of capital per worker. In the consequence,
growth of output per employed worker is retarded and/or under and unemployment grow. Output per head of
total population grows at a reduced rate or actually declines in absolute level. (Easterlin, 1967, p. 101)

As Johnson (1999) points out that this conclusion results from three assumptions: (a) the operation of the
law of diminishing returns when a factor of production is increased and all other factors are held constant;
(b) total investment is independent of population; and (c) the rate of productivity change is independent of
population. The second and third assumptions have been called into question by recent empirical analysis
and by the development of the new growth theory (Lucas, 1988; Romer, 1986).
Many scholars believe that increasing population puts pressure on natural resources and in the long run
will lead to exhaustion of natural resources and decline in output. This view is based on the static assumption
that the resources are fixed and finite. This assumption does not hold good when we take a dynamic view
and consider the interaction between resources and technology. Srinivasan, for example, asserts that ‘once
we get away from this extreme assumption that the resource requirement is fixed so that by definition
nothing else can be substituted for it and allow for potential substitutes, then the problem resource exhaustion
takes on a different complexion altogether’. He also points out that the global use of exhaustible resources
is primarily driven by income growth rather than by population growth. Simon (1976, 1980) has argued
that people and markets innovate in response to potential resource shortages, and therefore the resource
base is effectively infinite. According to him population growth helps resolve and not cause resource
scarcities and environmental problems.
Simon (1980) provides a powerful rebuttal to the bad news being propagated about the population
growth and natural resources. He refers to studies which show that world’s supply of arable land actually
Singh 493

increased over the period 1951 and 1965 (Simon, 1980, p. 1432). He asserts that the statement like ‘the
supplies of natural resources are finite’ is contrary to facts. According to him the term ‘finite’ is not only
inappropriate but is downright misleading in the context of natural resources, from both the practical and
the philosophical points of view (Simon, 1980, p. 1435).

Role of Institutions
More recently several scholars have highlighted the role of institutions and markets in mediating the
effect of population growth on economic development. According to Srinivasan,

[a]n examination of possible externalities from the point of view of resource (exhaustible and renewable) use
over time, capital accumulation, distribution of income within and between generations, and so on. suggests that
many of the alleged deleterious consequences result more from inappropriate policies and institutions than from
rapid population growth. Once the appropriate institutional framework and undistorted markets are in place,
there is little scope for population policy as such. (Srinivasan, 1987, abstract)

Similarly, Chincota and Engleman (1997) argue that ‘how each nation fares as it undergoes the changes
and stresses brought about by population growth depends, at least in part, upon the nature of its
institutions’. To quote them:

Where adaptive institutions are in place—as in parts of Asia and increasingly in Latin America—a growing
number of economists recognize opportunities for positive demographic–economic feedbacks. Conversely where
institutions are weak, revisionists expect few of the benefits of fertility decline to be reflected any time soon in
national economic statistics. Historical evidence suggests that fertility decline requires a sound institutional
framework to boost economic growth over the short run. (Chincota & Engleman, 1997, p. 14)

The Empirical Evidence

A large literature has emerged in recent decades about the empirical evidence of the impact of population
growth on economic growth. While some of the studies point to a negative impact of population growth,
most of the studies support the view that population growth has a positive impact on economic growth.
According to Johnson,

[t]here is substantial evidence that contradicts the conclusion that population growth is adverse to economic
growth. Most empirical analyses of the relationship between population and economic growth do not find that
there is an adverse effect. The history of the world has been that periods of low population growth have been
periods of low economic growth and that high rates of economic growth have occurred when population growth
is also high. Most of human history has had low population and low economic growth. Only recently has there
been both rapid population and economic growth. (Johnson, 1999, p. 1)

Reher (2011) asserts the following:

in historic Europe evidence suggests that we are looking at a largely virtuous circle of demographic change leading
more or less directly to economic and social modernization. But in many other parts of the world, where the
demographic transition took place much more recently, demographic change has often appeared to be related to
economic hardship, massive displacement of individuals, and social and political instability. (Reher, 2011, p. 21)

Population explosion witnessed in some developing countries in recent years is seen by some scholars to
be associated with economic distress. Cassen, for example observes the following:
494 Indian Journal of Human Development 15(3)

While some effects of population growth in developing countries have been exaggerated, especially the savings
effect, there seem to be few convincing arguments disturbing the conclusion that rapid population growth slows
down the improvement of average living standards. Obvious problems arise in the generation of productive
employment, the maintenance of food supplies and the provision of public services. The relative importance
of population among other factors in development does seem to have been both overplayed and underplayed.
(Cassen, 1976, p. 821)

On the other hand, many scholars argue that there is no strong correlation between population growth
and growth of per capita income. For instance, according to Easterlin,

[t]he theories and evidence surveyed here do not, it seems add up to any clear-cut generalization as to the effect
of population growth on economic development in today’s less developed areas. Indeed, it may well be that no
single generalization is appropriate for countries differing as widely in growth rates, densities, and income levels
as these areas do. (Easterlin, 1967, p. 11)

Studies by Kuznets demonstrated that there is lack of any significant correlation between rates of population
growth and per-capita output across a sample of developing countries (Kuznets, 1967). According to him
‘purely technological and economic factors allow sufficient margins, in most underdeveloped countries, to
permit substantial and sustained economic growth, even with a significant rise in population―at least for
the proximate future of two to three decades’ (Kuznets, 1973, p. 41). In a similar vein Simon (1976, 1980)
argues that human innovation assures that population growth has long-term benefits for living standards, in
both developing and developed countries. He asserts that the standard of living has risen along with the size
of the world’s population since the beginning of recorded time (Simon, 1976, p. 580).
Some studies focus on specific hypothesis related to population growth. For, instance Schultz (1987)
examined the investment-diversion effect of high fertility rate. Contrary to general belief he found that
‘over the period 1969–1980, enrolment rates and number of years of schooling completed rose significantly
in low-income countries, and that the relative size of the school-age cohort exerted no independent influence
on the share of GNP allocated to education’. Other studies also found that high youth dependency ratios did
not have a negative impact on savings and economic growth (Kelley, 1988, p. 1707; National Research
Council, 1986, pp. 44–45). Rosenzweig (1990) found that ‘alterations in the returns to human capital
associated with exogenous technological change lead simultaneously to increases in schooling investments
and to significant reductions in fertility in the absence of family planning interventions…’.
Higgins and Williamson (1997) find that much of the impressive rise in Asian savings rates since the
1960s can be explained by the equally impressive decline in youth dependency burdens. According to them
wherever the youth dependency burden has fallen dramatically, Asian countries have relinquished their
reliance on foreign capital.
Kelley and Schmidt (1994) find that the impact of the rate of population growth on per capita output
growth: (a) was not statistically significant in the 1960s or 1970s; (b) is negative, statistically significant,
and large in the 1980s; and (c) varies with the level of economic development: it is negative in the LDCs
and sometimes positive for the DCs. Their further research revealed that:

In the 1960s and 1970s, the net impact of population growth appeared to be nil, but the separate effects of
the components of this change were sizable. Indeed, the costs of high birth rates were largely offset by the
contributions of mortality reduction. In the 1980s, however, the short-term costs of high birth rates increased,
especially in the LDCs. Also, even though the favorable effects of past births on current labor force growth
were positive, they were not sufficient to offset the current forgone growth-rate costs of births. The resulting
net impact on population growth became negative. This change was reinforced by a reduction in the impact of
Singh 495

mortality declines; the declines were concentrated in the early ages, where the effect on current labor force entry
was nil. (Kelley & Schmid, 1995, p. 554)

As pointed out by Peterson and Wesley (2017) empirical work on the effects of population growth on
economic growth in particular countries has generated contradictory results. For example, Sethy and
Sahoo (2015) and Tumwebaze and Ijjo (2015) find that population growth has a positive impact on per
capita economic growth in India and the Eastern and Southern Africa region. In contrast, Yao et al.
(2013) and Banerjee (2012) conclude that there is a negative relationship between population and per
capita GDP growth in China and Australia. Huang and Xie (2013) find that current population growth
has a negative effect on economic growth while lagged population growth has a positive effect so that
there is no long-term relationship between these variables (Peterson & Wesley, 2017, p. 8).
After an extensive review of literature and historical demographic trends Peterson concludes that:

…population growth is an important factor in overall economic growth and may even contribute to increased
growth in per capita output in some cases. In low-income countries, rapid population growth is likely to be
detrimental in the short and medium term because it leads to large numbers of dependent children. In the longer
run, there is likely to be a demographic dividend in these countries as these young people become productive
adults. (Peterson & Wesley, 2017, p. 12)

Robin Barlow argues that in the short run, an increase in fertility tends to have negative effects on per
capita income growth but in the long run, its effects tend to be positive (Barlow, 1994, p. 153–154). He
argues that because current fertility is highly correlated with past fertility, current population growth
rates capture both the short-run negative and the long-run positive effects. The statistical exercise
carried out by him show that if lagged fertility is added to the current rate of population growth as a
second predictor of current economic growth, the correlation between current economic growth and
current population growth becomes significantly negative (Barlow, 1994, 154–155). Huang and Xie
(2013) also find that current population growth has a negative effect on economic growth while lagged
population growth has a positive effect so that there is no long-term relationship between these
variables.
To sum up the empirical findings, it may be said that historically population growth and economic
growth moved together in European countries, which were the first to witness demographic transition.
Recent studies also show that in many cases population growth and economic growth moved together
as in far east and China. Many statistical studies show that population growth has a positive impact on
per capita income growth. Some studies, however, point to a weak correlation between the two, while
a few studies show that rapid population growth is associated with economic distress and poverty as
in some Latin American and African countries.
We now turn to the discussion of population and economic growth in two of the most populated and
rapidly growing economics, that is, China and India.

The Case of China and India

The demographic transition in China took place at an unparalleled pace seen anywhere in the world. The
mortality rates declined sharply within two decades in sixties and seventies. The improvement in public
health and primary health care were responsible for marked decline in mortality rate and improvement in
life expectancy in China (Feng, 2011). The fertility rate was more than halved, from 5.8 to 2.3, within a
decade between 1970 and 1980 and came down to 1.5 by turn of the century. It needs to be mentioned that
these changes took place before China announced its famous one child policy in 1979. Thus, China’s
496 Indian Journal of Human Development 15(3)

demographic transition largely resulted from the Chinese peoples’ willingness to control the family size
rather than from the coercive family control policy of the Chinese government. As Wang Feng points out:

To credit China’s demographic transition entirely or even mostly to the Chinese state, however, would be greatly
mistaken. A careful look at the timing and underlying process of China’s demographic transition shows that in
terms of both origin and agency, it is the Chinese people, not the Chinese state, who are the main motors behind
China’s demographic transition. (Feng, 2011, p. 177)

China launched its economic reforms in 1978, which pushed the rate of growth of GDP per capita to
6.1% per annum in the following years. Population growth during this period was a modest 1.43% per
annum. Thus, China’s period of rapid economic growth occurred while the rate of population growth was
several fold greater than it had been historically as pointed out by Johnson (1999). He also highlights the
fact that: ‘China has provided abundant evidence that economic policies have a far greater effect—either
positive or negative—on economic growth and development than any other variable, including population
growth, that is thought to influence the rate of economic growth’ (Johnson, 1999, pp. 14–15).
The high growth rate of Chinese economy which took place in the nineties was partly contributed by
the higher rates of population growth during the 1960s and early 1970s leading to a rise in the working
age population and the percentage of the population employed (Johnson, 1999, p. 6). However, as China
has entered into the final phase of demographic transition the age structure is shifting towards the old age
group, which is likely to have a negative effect on saving rates and economic growth. This has forced
the Chinese government to adopt two child norm instead of the one child norm and more recently a three
child norm.
As compared to China demographic transition was much slower in India and population growth rates
were much higher. Several scholars have examined the relationship between population growth and
economic development in India. Dawson and Tiffin (1998) have examined the existence of a long-run
relationship between population and per capita GDP in India for 1950–1993 using cointegration analysis.
During this period population increased about two and a half times at an average annual growth rate of
2.1%, while real per capita GDP increased by 2.25 times increasing at an average annual growth rate of
1.9%. The authors applied unit root test on the two series and found that population is trend stationary,
while per capita income has a unit root. Therefore, according to them a long-run relationship between the
two variables cannot exist. They also used Johansen’s procedure to test for cointegration between the two
variables and found absence of any cointegrating vector, thus confirming the conclusions of the unit root
tests. They conclude on the basis of their statistical analysis that population growth neither causes per
capita income growth nor is caused by it (Dawson & Triffin, 1998, p. 149).
Sethy and Sahoo (2015) use the cointegration, regression analysis and granger causality technique to
investigate the relationship between population and economic growth in case of India. They find that
‘there is positive relation between total labour force and per capita GDP but per capita saving more
positively affect per capita GDP than total labour force and the result also indicate the positive relation
between population growth and per capita GDP’ (Sethy & Sahoo, 2015, p. 285). They further conclude
that per capita saving and per capita GDP show no short run impact between growth and but there is no
problem of adjustment in the long run. The co-integrating test reveals the presence of co-integrating
(long run) relationship between population and economic growth. According to them the evidence tends
to support the view that population growth spurs economic development in context of India.
Chincota and Engleman (1997) point out that India’s per capita GDP averaged 3.2% annual growth
from 1983 to 1992, while its population increased by 20 per cent during the period. However, they point
out that reliance on large irrigation projects to increase agricultural production has led to considerable
damage to soil, forest productivity and biodiversity. They also point out that increased population is
putting pressure on the government budget to provide for education.
Singh 497

On the other hand, Rosenzweig and Wolpin (1980, p. 239) found that in India exogenous increases in
fertility decrease child quality and suggest that a decrease in family size brought about, say, by exogenous
improvements in birth control technology, would increase schooling levels of Indian children.
Van de Walle has examined the impact of population growth on poverty at the state level using the
data from 1959 to 1970. Using a pooled model with variable slope coefficients she has demonstrated that
poverty in India during the 1960s was a function of both agricultural production and of population. Eight
states show significant relationships between agricultural output and poverty, but these vary considerably
between the states. Five states, namely, Maharashtra, West Bengal, Assam, Andhra Pradesh, and Punjab
and Haryana exhibit a positive relationship between the incidence of poverty and agricultural output,
while three states (Gujarat, Karnataka and Uttar Pradesh) reveal a negative link between the two variables
(van de Walle, 1985, p. 435). She emphasises that the identified population effect on poverty cannot be
properly viewed as a ‘Malthusian effect’ and the results reflect an association between population growth
and adverse changes in the distribution of income due to increased rural unemployment variables (van
de Walle, 1985, p. 438). Clearly a variety of factors besides population are operating in affecting poverty
levels in India. Also, the results are affected by state specific factors.

Role of Population Policy

Finally, we examine the question of the role of population policy in reducing fertility and promoting
growth. In view of the high population growth witnessed by them in the post-the Second World War
era a large number of developing countries have adopted family planning programmes. These
programmes have been supported by international donor agencies. However, many scholars are
sceptical about the effectiveness of these programmes in reducing fertility. Demeny, who has examined
the question of population policy and the demographic transition in a historical perspective, concludes
that the effectiveness of family planning programmes in reducing fertility remains a matter of
controversy (Demeny, 2011, p. 261). Lee also mentions that the importance of contraceptive technology
for fertility decline is hotly debated, with many economists viewing it as of relatively little importance.
He goes on to point out that the European fertility transition, for example, was achieved using coitus
interruptus. Schultz notes that several careful evaluations of family planning programmes (including
in Taiwan, Colombia and Indonesia) find a negative association between the regional intensity of
family planning programme treatment and the regional level of fertility in a country (Shultz, 2009, p.
4). Pritchette (1994) has argued forcefully that family planning programmes have little impact on
fertility. According to him 90% of the differences across countries in total fertility rates are accounted
for solely by differences in women’s reported desired fertility. His results contradict theories that
assert a large causal role for expansion of contraceptive use in the reductions of fertility.
On the other side, a number of scholars and policy makers do think that efforts are required to
reduce population growth in order to attain higher per capita income. The World Development Report
1984 investigated relationship between population growth and economic development. This report is
based on the understanding that rapid population growth hampers economic development. Thus,
population policy is a critical component of the strategy of economic development. The report,
however, recognises that appropriate policy environments and technological advances are key to
improving standards of living and that population dynamics play an important secondary role in this
process. To quote from the report:

In short, policies to reduce population growth can make an important contribution to development (especially
in the long run), but their beneficial effects will be greatly diminished if they are not supported by the right
498 Indian Journal of Human Development 15(3)

macroeconomic and sectoral policies. At the same time, failure to address the population problem will itself
reduce the set of macroeconomic and sectoral policies that are possible, and permanently foreclose some long-
run development options. (World Bank, 1984, p. 105)

Das Gupta et al. in a World Bank Working Paper highlight the role of family planning programmes in the
following words:

Family planning programs seek to expand the availability of contraceptives and reduce barriers to their use. They
are especially important for the poor, who typically have higher numbers of unwanted children than the rich
except in settings with very effective programs, such as Indonesia…. Family planning programs also typically
disseminate information on contraception, and on how lower fertility can help parents invest in their children
and avail new opportunities for raising living standards. Parents—especially poorer parents—have imperfect
information on these issues. (Das Gupta et al., 2011, p. 13)

There is a growing realisation of the fact that fertility decline is dependent upon socio-economic
development. As Demeny points out:

Additions to the population are the result of a multitude of individual decisions concerning childbearing. Within
the constraints of their social milieu, these decisions reflect an implicit calculus by parents about the private costs
and benefits of children to them, including consideration of the interests of the children themselves. (Demeny,
2011, p. 252)

The 1974 Bucharest conference on population, spelled out many of the socioeconomic developments
necessary for fertility to shift from high to low levels.
Easterlin also advocates such approach to population policy. According to him

…policies for fertility reduction should stress voluntary decisions on the part of the individuals concerned rather
than compulsion, and should be conceived in the context of a much wider program for social, economic, and
political development, that is, of a program strengthening modernization generally. Indeed, it is only in such a
context that these measures are likely to be successful. (Easterlin, 1967, p. 108)

Caldwell and Caldwell (1997) point out that the demographic transition in Asian countries was the result
of both socioeconomic change and strong family planning programmes.
The Indian experience also confirms these findings about the role of socio-economic development in
reducing population growth. The southern states like Kerala, Tamil Nadu and Andhra Pradesh which
rank higher in human development index have been successful in reducing fertility levels in some cases
below the replacement rate. On the other hand, states like UP, Bihar and Rajasthan which rank lower in
human development continue to have relatively higher fertility. Scholars have referred to progressive
gender arrangements in the south that grant women greater autonomy and say in family matters is often
contrasted with restrictive gender arrangements in the north (Dyson & Moore, 1983). At the same time
several other factors that have influenced fertility decline in India, such as, exposure to mass media,
increasing aspirations engendered by the possibility of economic movement, and political freedoms
(Spoorenberg & Dommaraju, 2012). Jain has examined the pattern of fertility decline among Indian
states and concludes that conditions conducive to fertility decline include high adult female literacy and
low infant mortality as indicators of social development, and high contraceptive use and, to a lesser
extent, high female age at marriage as proximate determinants of fertility (Jain, 1985).
According to Wang:
Singh 499

…a more effective measure to reduce the population growth in the very traditional and highly diversified
Indian society should be a comprehensive socioeconomic development. Such a comprehensive socioeconomic
development may include the achievement of equal status for women and lower caste people, improvement
of education, development of economy, urbanization, and modernization of the whole society. When the
socioeconomic conditions improve, birth rate will be lower and the overpopulation problem will be reduced.
(Wang, 2019, p. 143)

Concluding Remarks
This article reviews the relationship between population growth and economic development based on a
survey of literature. The opinion of economists and demographers on this question is sharply divided.
Those who consider population growth as a positive factor in development emphasise that population
growth induces technological change, allows greater economies of scale, lead to improvement in the
quality of labour force as new and educated workers replace the old workers, enables women to participate
in the labour market. On the other hand, those who believe that population growth adversely affects
economic growth lay stress on factors like increasing pressure on land, diversion of savings to higher
consumption, increasing dependency ratio, and so on.
Many scholars believe that increasing population puts pressure on natural resources and in the long
run will lead to exhaustion of natural resources and decline in output. The critics of this view have
pointed out that this view is based on the static assumption that the resources are fixed and finite. This
assumption does not hold good when we take a dynamic view and consider the interaction between
resources and technology. If we take a dynamic view that resources are not fixed and technology holds
promise for raising resource use efficiency and find substitutes for scarce resources. More recently
several scholars have highlighted the role of institutions and markets in mediating the effect of population
growth on economic development. They point out that the alleged deleterious consequences result more
from inappropriate policies and institutions than from rapid population growth. If the right set of institutes
are in place and markets are functioning efficiently the pressures put up by increased population can be
managed without adversely affecting the process of economic growth.
The empirical studies generally do not support the conclusion that population growth is adverse to
economic growth though contrary findings are also reported. In the case of Europe, we find that a largely
virtuous circle of demographic change was operating leading more or less directly to economic and
social modernisation. Recent studies also show that in many cases population growth and economic
growth moved together as in far east, China and India. Some studies, however, point to a weak correlation
between the two. A few scholars, however, opine that rapid population growth is associated with
economic distress and poverty as in some Latin American and African countries.
We may conclude that by and large population growth has not hampered economic growth. However,
there are some cases where economic growth is too slow to accommodate rising population burden as in
some sub-Saharan African countries. The scholars have also pointed out that population is only one of
the many factors that affect economic growth. If appropriate economic policies are followed rising
economic growth will be able to overcome any adverse effect of population growth.
Alarmed by the sharp acceleration in population growth due to sharp decline in death rate and slower
decline in fertility rate, a large number of developing countries have adopted family planning programmes
aimed at reducing fertility and slow down population growth. These programmes have been actively
encouraged and supported by international donor agencies. However, many scholars are sceptical about
the effectiveness of these programmes in reducing fertility.
500 Indian Journal of Human Development 15(3)

There is a growing realisation of the fact that fertility decline is dependent upon socio-economic
development. There is strong evidence that fertility decline is associated with the rise in family income
and literacy particularly of women. Fertility depends upon the decisions of millions of households about
the desired number of children. In less developed countries where the cost of additional child is low and
children are expected to contribute to family income and support parents in old age parents prefer to have
a larger number of children. However, increasing urbanisation and modernisation of the economy brings
about a change in the attitude of the parents and incentivise them to adopt small family norm due to
rising cost of additional child and desire for improving living standards of family.
There is a general consensus among demographers that policies for fertility reduction should stress
voluntary decisions on the part of the individuals concerned rather than compulsion and should be
conceived in the context of a much wider programme for social, economic, and political development.
Public policy should aim at promoting literacy, strengthen public health system, promote women
empowerment, provide information on population control methods and their advantages and make
available contraceptives at low cost. Only then efforts to reduce fertility can succeed. The positive and
negative incentives in this situation have a limited role to play in this context.

Declaration of Conflicting Interests

The author declare no potential conflict of interest with respect to the research, authorship, and/or publication of
this article.

Funding
The author received no financial support for the research, authorship and/or publication of this article.

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