Does Population Growth Make People Poor?

by Jacob Maichel

Demography is the measurement of large populations and their composition including age, sex, religion, and other characteristics. Demography allows us  to understand what drives behaviors and choices of groups of people. Governments fund demographic studies because it allows them to understand those they serve and to stay in power.  However, simply studying demographic trends may not be as effective in achieving these goals due to large shifts in local and global populations. It is more challenging than ever for governments to impose their will on the public if the preferences of the electorate are always changing. Ultimately, population shifts can have a clear impacts on governmental power.

To understand countries’ population shifts, it is important to understand what variables control the shifts: fertility, mortality, and migration. The most important of these is without doubt fertility, as mortality is somewhat stable and migration can be easily manipulated by border policies. Fertility can motivate government policies and cause power shifts throughout time. Take for example modern day Lebanon. According to the 1932 census, government leaders were split 6 Christians to 5 Muslims, based on population. Fertility levels for Muslims, however, were about 2 children per women higher than for Christians, and by 1975 Lebanon was a Muslim-majority country.

The population of the developing world is increasing rapidly. From 1950-1985 developed countries grew a sluggish 49% compared to a prolific 119% increase in developing countries over the same period. This rapid growth is often perceived as a proliferation of poverty throughout the regions or at least an increase in the number of people in poverty. Some argue that resource wars and food insecurity are an inevitable result of rapid increases in third world populations. However, this has not been the case empirically and is an unlikely to happen in the future.

From 1900-1987 global population tripled, as did production and output. This means that more people were producing more things and using more resources than ever before. If population grew but output did not, this would mean that prices would be higher than ever. However, his is not the case. Resources are less expensive now than they were at the turn of the century! This is largely due to human innovation creating new methods or using other materials we had not previously utilized. One example of this is plastic. Invented in 1907 by Leo Hendrik Baekeland, a Belgian-born American living in New York state, this cheap alternative allowed to reduce consumption in resources like wood and metals and has led to innovations in sanitation and curtailed the spread of disease.

In the case of regions such as Sub-Saharan Africa many of the socio-economic ills attributed to population growth are typically caused by another more pernicious evil: corrupt governments. Many of these countries suffer from extremely invasive governments that reach into every corner of the national economy. This centralization exacerbates extreme poverty because poor institutional quality reduces the ability of entrepreneurs and private businesses to create wealth for society. This is something that we do not experience to such degree here. Though the government does interfere somewhat in the economy and markets, the protection of property rights afforded to us through higher-quality institutions allows us many freedoms unknown to many around the world.

Read more:
Eberstadt, Nicholas. Population, Poverty, Policy. American Enterprise Institute, 2016.

Jacob C. Maichel is a Graduate Assistant at the Gwartney Institute and an MBA student at Ottawa University