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While development can include a wide range of meanings, here, development is taken to mean economic development defined to refer narrowly to economic growth and then more broadly to the economic transformations leading to the emergence of modern economic institutions and practices and the disappearance of traditional forms.
The relationship between population and economic development is highly contested and has been so for centuries. Adam Smith saw population growth as a stimulus to economic growth because it enlarged the size of the market and provided opportunities for economies of scale and hence more efficient production. This was contested by Thomas Malthus and David Ricardo who argued that there was a law of diminishing returns to scale. Their view was that population growth would eventually lead to natural resource constraints, especially a shortage of cultivatable land. The subsequent advance of technology and the associated rise in human capital through education has served to prolong the debate. Since the nineteenth century, according to Angus Maddison, gross production has risen considerably faster than population and has continued to do so until today.
Debate about the negative effects of rapid population growth on economic development arose again in the post-colonial era. In 1958, Coale and Hoover argued that a reduction in fertility would reduce the number of children that a country needed to support while, at the same time, having little or no impact on the size of the labor force for the following two decades. This reduction in dependency would reduce consumption and increase savings and investment and, hence, stimulate economic growth. The result was the funding and implementation of government family planning programs in many developing countries from the 1960s onwards that have contributed to dramatic declines in fertility rates in most developing countries. This argument was broadened at the beginning of the 1970s into a global argument in the writings of Paul Ehrlich and the Club of Rome. They argued that global resources would be depleted if population growth was above zero.
In reaction to these claims, Simon Kuznets and Julian Simon re-asserted the eighteenth-century view of Adam Smith that population growth stimulated economic growth. They argued that a growing population leads to increases in the supply of labor preventing wage inflation and promoting mobility, productivity and innovation. Notably, Ester Boserup argued that population growth provided a stimulus to technological progress through the innovative character of a young labor force, through increased competition in the labor force and through economies of scale in technological research and development.
As more empirical evidence has been examined on the relationship between population and economic development, conclusions have become increasingly indefinite. This is evidenced by the progression across three nationally commissioned reports from 1971 to 1995. The US National Academy of Sciences Report of 1971 concluded, in keeping with the conventional wisdom of the time, that, in general, rapid population growth had a negative impact on economic development. By the time of the 1986 Report of the US National Academy of Sciences, the conclusion was consistent with the 1971 report but was couched in caveats that left the conclusion in heavy doubt. A report commissioned by the Australian Government in 1994 was almost totally agnostic, concluding that population growth is likely to produce both positive and negative impacts on economic development and the size of the net effect cannot be determined from existing evidence.
- Ahlburg, D., Kelley, A., & Mason, K. (eds.) (1996) The Impact of Population Growth and Well-Being in Developing Countries. Springer-Verlag, Berlin (based on a report to the Australian Government in 1994).
- Bloom, D., Canning, D., & Sevilla, J. (2003) The Demographic Dividend: A New Perspective on the Economic Consequences of Population Change. RAND, Santa Monica, CA.
- US National Academy of Sciences (1986) Population Growth and Economic Development: Policy Questions. National Research Council, National Academy Press, Washington, DC.