12 Main Consequences of Population Growth

1. Investment:

Faster population growth makes the choice more scarce between higher consumption now and the investment needed to bring higher consumption in the future. Economic development depends upon investment. In UDCs the resources available for investment are limited. Therefore, rapid population growth retards investment needed for higher future consumption.

 

2. Overuse of Resources:

Rapid population growth tends to overuse the country’s natural resources. This is particularly the case where the majority of people are dependent on agriculture for their livelihood. With rapidly rising population, agricultural holdings become smaller and unremunerative to cultivate. There is no possibility of increasing farm production through the use of new land (extensive cultivation).
Consequently, many households continue to live in poverty. In fact, rapid population growth leads to the overuse of land, thereby endangering the welfare of future generations. Even in countries where natural resources are untapped such as Brazil and other Latin American countries, rapidly increasing population makes it difficult to invest in roads, public services, drainage and other agricultural infrastructure needed to tap such resources.
 

3. Urbanisation:

With rapidly growing population, it becomes difficult to manage the adjustments that accompany economic and social change. Urbanisation in UDCs creates such problems as housing, power, water, transport, etc. Besides, growing population threatens permanent environmental damage through urbanisation in some rural areas.

 

4. Per Capita Income:

The effect of population growth on per capita income is unfavourable.

The growth of population tends to retard the per capita income in three ways:
(i) It increases the pressure of population on land;

(ii) It leads to rise in costs of consumption goods because of the scarcity of the cooperant factors to increase their supplies; and

(iii) It leads to a decline in the accumulation of capital because with increase in family members, expenses increase.

These adverse effects of population growth on per capita income operate more severely if the percentage of children in the total population is high, as is actually the case in all UDCs. Children involve economic costs in the form of time and money spent in bringing them up.

But they are also a form of investment if they work during childhood as is the case with the majority of families, and if they support parents in old age which is rare in the case of majority of children.

As these economic gains from having many children are uncertain, therefore a large number of children in the population entails a heavy burden on the economy, because these children simply consume and do not add to the national product. Another factor is the low expectancy of life in underdeveloped countries.
It means that there are more children to support and few adults to earn thereby bringing down the per capita income. Whatever increase in national income takes place that is nullified by the increase in population. Thus the effect of population growth is to lower the per capita income.

 

5. Standard of Living:

Since one of the important determinants of the standard of living is the per capita income, the factors affecting per capita income in relation to population growth equally apply to the standard of living. A rapidly increasing population leads to an increased demand for food products, clothes, houses, etc. But their supplies cannot be increased in the short run due to the lack of cooperant factors like raw materials, skilled labour, capital, etc.
Consequently, their costs and prices rise which raise the cost of living of the masses. This brings down further the already low standard of living. Poverty breeds large number of children which increases poverty further, and the vicious circle of poverty, more children and low standard of living continues.
But Hirschman and Colin Clark opine that population pressures leading to lowering of standards will encourage the people of UDCs to work hard in order to improve their standard of living.

 

6. Agricultural Development:

In UDCs, people mostly live in rural areas. Agriculture is their main occupation. So with population growth the land-man ratio is disturbed. Pressure of population on land increases because the supply of land is inelastic. It adds to disguised unemployment and reduces per capita productivity further. As the number of landless workers increases, their wages fall. Thus low per capita productivity reduces the propensity to save and invest.
As a result, the use of improved techniques and other improvements on land are not possible. Capital formation in agriculture suffers and the economy is bogged down to the subsistence level. The problem of feeding the additional population becomes serious due to acute shortage of food products.
These have to be imported which increases the balance of payments difficulties. Thus, the growth of population retards agricultural development and creates a number of other problems discussed above.

 

7. Employment:

A rapidly increasing population plunges the economy into mass unemployment and under-employment. As population increases, the proportion of workers to total population rises. But in the absence of complementary resources, it is not possible to expand jobs. The result is that with the increase in labour force, unemployment and under-employment increases. A rapidly increasing population reduces incomes, savings and investment.
Thus capital formation is retarded and job opportunities are reduced, thereby increasing unemployment. Moreover, as the labour force increases in relation to land, capital and other resources, complementary factors available per worker decline.
As a result, unemployment and under-employment increase. UDCs have a backlog of unemployment which keeps on growing with a rapidly increasing population. This tends to raise the level of unemployment manifold as compared with the actual increase in labour force.

 

8. Social Infrastructure:

Rapidly growing population necessitates large investments in social infrastructure and diverts resources from directly productive assets. Due to the scarcity of resources, it is not possible to provide educational, health, medical, transport and housing facilities to the entire population.
There is over-crowding everywhere. As a result, the quality of these services goes down. To provide this social infrastructure requires huge investments.

 

9. Labour Force:

The labour force in an economy is the ratio of working population to total population. Assuming 50 years as the average life-expectancy in an under-developed country, the labour force is in effect the number of people in the age-group of 15-50 years. During the demographic transitional phase, the birth rate is high and the death rate is on the decline. The result is that a larger percentage of the total population is in the lower age-group of 1-15 years.
It means that the addition to the lower age-group is larger than in the working age-group. A large percentage of children in the labour force is a heavy burden on the economy. It also implies that the labour force tends to increase with the increase in population.
It will grow even faster, if more women seek paid employment. Since it is not possible to increase capital per worker (i.e., capital deepening) with growing labour force, each worker will produce less than before.
This will reduce productivity and incomes. Wages will fall in relation to profits and rents, thereby increasing income inequalities. Besides, rapid growth in the labour force increases both open unemployment and under-employment in urban and rural areas.

 

10. Capital Formation:

Population growth retards capital formation. As population increases, per capita available income declines. People are required to feed more children with the same income. It means more expenditure on consumption and a further fall in the already low savings and consequently in the level of investment.
Further, a rapidly growing population by lowering incomes, savings and investment compels the people to use a low level technology which further retards capital formation.

 

11. Environment Rapid Population Growth Leads to Environmental Damage:

Scarcity of land due to rapidly increasing population pushes large number of people to ecologically sensitive areas such as hillsides and tropical forests. It leads to overgrazing and cutting of forests for cultivation leading to severe environmental damage.
Moreover, the pressure of rapid growth of population forces people to obtain more food for themselves and their livestock. As a result, they over-cultivate the semi-arid areas. This leads to desertification over the long run when land stops yielding anything.
Besides, rapid population growth leads to the migration of large numbers to urban areas with industrialization. This results in severe air, water and noise pollution in cities and towns.

 

12. World Economy:

Rapid population growth also affects UDCs in relation to the world economy in a number of ways. First, rapid population growth tends to increase income disparities between UDCs and developed countries because the per capita incomes decline with growth in numbers in the former.
Second, rapid population growth encourages international migration. But these are limited only to the Middle East countries where there is a dearth of skilled and unskilled labour. But the developed countries place restrictions on immigration because labour from poor countries adversely affects the wages of native workers and also creates social and political tensions.
Third, emigration tends to increase wages of workers substantially at home. Fourth, another beneficial effect of this is that emigrants remit large sums of money back home. This increases family incomes and their living standards at home. Such families spend more on food, clothing and on modern household gadgets. Thus they lead more comfortable lives. Some repay family debts, while others invest in agricultural land and urban real estate.
On their return, some enterprising persons start new ventures and others expand family-owned commercial and manufacturing businesses. Further, remittances by emigrants help finance the countries balance of payments deficit. But UDCs are great losers because of the ‘brain drain’ when professional and technical workers emigrate to other countries.
They subsidize the educational costs of such personnel but are unable to tax their incomes. The money they remit is insignificant as compared with the above two types of losses. Often the best of the brains are allowed to settle permanently in the employing country which is a permanent loss to the home country.
Lastly, with rapid population growth the domestic consumption of even exportable goods increases. Consequently, there is a decline in the exportable surplus. On the other hand, to meet the demand of rapidly increasing population, more food and other consumer goods are required.
It leads to an increase in imports of such goods along with those of capital goods needed for the development. Reduction in exports and increase in imports lead to deterioration in the balance of payments position of the country. This may force the state to curtail the importation of capital goods which will adversely affect economic development of the country.

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