Effects of Changing Population Sizes | Economics for GCSE/IGCSE - Year 11 PDF Download

The Optimum Population

• Overpopulation arises when a country or region accommodates more people than its resources and technology can adequately support, leading to:
  • Increased levels of pollution
  • Elevated crime rates
  • Higher unemployment or underemployment
  • Escalated levels of food and water shortages
  • Intensified pressure on services like hospitals and schools.
• Underpopulation occurs when there are surplus resources available compared to the population's effective utilization, potentially resulting in:
  • Fewer taxpayers, leading to higher taxes
  • Underutilized resources and subsequent wastage
  • Shortage of labor force
  • Decreased levels of exports and production, impacting regional wealth
  • Diminished demand for goods and services.
• Optimum population denotes a balance between the population size and available resources/technology.

• An optimal population leads to the highest standard of living by ensuring:
  • Avoidance of excessive population strain or resource scarcity detrimental to living standards.
  • Sufficient population to develop the country's resources effectively.

Population Distribution

• The composition of a population, including factors such as age, sex, ethnicity, and religion, constitutes its population structure.
• The population structure is shaped by fluctuations in:
  • Birth rate
  • Death rate
  • Net migration
• A population pyramid is a graphical representation that illustrates the two primary characteristics of age and sex within a population.

Population Pyramids

• Population pyramids serve as tools to visualize the gender and age composition of a specific population.
  • They depict the distribution of population across various age brackets and between males and females.
• These pyramids aid in identifying several demographic groups:
  • Young dependents
  • Old dependents, such as the number of retired individuals
  • Economically active segments (working population or labor force)
  • Dependency ratio, which compares the number of dependents (young and old) to the working-age population.

• In less economically developed countries (LEDCs) like Niger, a concave pyramid shape in the population pyramid suggests several key characteristics:
  • High birth rate
  • Low life expectancy
  • High death rate, though starting to decline, with mortality occurring across all age groups
  • Elevated infant mortality rate, notably showing a significant decrease between ages 0-5
  • Dominance of a young dependent population in the age distribution.

• The population pyramid reveals several trends:
  • Declining birth rate, evident by the smaller population at younger ages, notably starting from around age 29.
  • Increasing life expectancy, illustrated by the relatively consistent distribution of population across older age groups, with a significant portion living much longer.
  • Decreasing death rate, suggested by the consistent population distribution across older age groups, particularly up to age 70.
  • Low infant mortality, as indicated by minimal changes in population size between ages 0-9.
  • Larger working-age population, with a substantial proportion of the population falling within the age range of 15 to 69.

• The population pyramid portrays several significant trends:
  • Declining birth rate, evidenced by the decreasing population levels observed from age 29 downwards.
  • Increasing life expectancy, highlighted by the relatively uniform distribution of population across older age groups, with a notable portion reaching advanced ages.
  • Higher death rate compared to the birth rate, attributed to the aging population structure.
  • Low infant mortality, indicated by the minimal population changes in the younger age groups.
  • Aging population, characterized by a substantial proportion of older individuals aged 40 and above, suggesting an increased dependency ratio.

Effects of Population Changes

• Population changes can significantly impact the economy, leading to alterations in consumption patterns, production levels, lifestyles, standards of living, and government strategies (including fiscal, monetary, and supply-side policies).

• Typical Population Changes:

  • As economies progress, they often experience progressively aging populations.
  • Developing economies tend to witness declining birth rates.
  • Net migration can fluctuate due to factors such as war, famine, natural disasters, and government decisions.

Aging Populations

• Numerous developed economies are grappling with aging populations and a rise in the older dependent demographic.
• The consequences of this demographic shift encompass:
  • Escalated pension expenditures by governments.
  • Heightened demand for care homes, both public and private.
  • Augmented strain on healthcare and social care services, leading to increased government spending.
  • Diminished labor force, often resulting in reduced tax revenue for governments.
  • Firms encountering worker shortages, impacting productivity.
  • Labor shortages leading to increased wage costs for firms.

Falling Birth Rates

Declining birth rates exert various impacts on an economy:

• School closures may occur due to fewer children, affecting educational infrastructure.
• Anticipated future labor shortages may emerge.
• Governments often implement incentives to encourage families to have more children, aiming to address demographic challenges.
• Migration laws might be altered to foster immigration, mitigating potential labor shortages.
  • However, excessive immigration can alter the nature and cultural fabric of different regions within a country.

Migration

• Migration can trigger an imbalance in the population structure in certain countries, as seen in the UAE, where there is a notable surplus of males compared to females.
• Rapid population growth attributed to migration can engender several consequences:
  • Elevated strain on public services like healthcare and schools, resulting in augmented costs for the government.
  • Housing shortages, which can contribute to social issues within society.
  • Escalating traffic congestion, presenting a negative externality.
  • Heightened water and air pollution, also representing negative externalities.
  • Potential food shortages due to increased demand surpassing supply.