Although intuitively most people would theorize that an increase in population growth will lead to a decrease in per capita income, the empirical evidence points does not support this relationship. Two papers, Jeff Kling and Lant Prichett’s, Where in the World is Population Growth Bad?, and Lant Pritchett’s, “Population; Factor Accumulation and Productivity,” set out to find the relationship between population growth and economic growth, and both admittedly fail to uncover a relationship.
Kling and Prichett’s joint aticle specifically attempts to discover “those conditions under which population growth worsens economic performance”( Kling and Prichett 3). They outline three main points that provide empirical evidence as to why there is no clear link between increased population growth and negative consequences on the economy. Firstly, the article explains, “there has been at best a weak correlation between the rate of growth of population and GDP per capita growth in the historical experience of the now developed countries.”( Kling and Prichett 4). Secondly, Kling and Prichett point out that population growth and economic growth have simultaneously accelerated over the course of human history. World population growth has been accompanied by an increase in world per capita income, not a decrease. Finally, the article states, “numerous studies have found no consistent, statistically significant correlation ( or partial correlation) between GDP per capita growth and population growth.” (Kling Prichett 5)
The relationship between population growth and economic growth remains unclear and seemingly insignificant from the empirical evidence. Despite a lack of evidence, Kling and Prichett point out that “very few who work on population believes this average impact is true for all countries.” ( Kling and Prichett 27) The main objection to the empirical evidence would be the constraints on the data that force imperfect results. The initial aim of the study is to uncover where in the world population growth is bad for economic growth, so that efforts to reduce population are focused on those countries. Unfortunately, the study fails to identify which countries are most in need of reducing population growth in order to increase economic development.
In Prichett’s solo article, he attempts to uncover why there is no clear link between population growth and per capita output. He hypothesizes that perhaps the diminishing returns of marginal labor is offset by an increase in productivity. Prichett outlines the classical and neo-classical theories of population growth, which emphasizes the diminishing returns to labor, and the lower level of steady state output associated with and higher population growth. But Prichett suggests that perhaps these effects are offset by an increase in productivity for four reasons: “a)innovations by population pressures, b) innovations produced by greater numbers, c) scale economies, d) agglomeration economies.” (Prichett 4) Ultimately, Prichett accepts only three possible reasons for an increase in productivity, eliminating the economies of scale argument. As he explains, large countries do not necessarily grow faster and empirically, do not have higher rates of technological progress. (Prichett 5) In addition to increased productivity, Prichett presents empirical evidence that physical capital is not fixed, providing one more reason to why an increase in population growth does not lead to a decline in per capita income.
Both articles present counter empirical evidence to the predominant view that population growth is not necessarily negatively related to economic growth. The effect of these articles is to question intuition and, unfortunately, to complicate, not clarify, the population debate.
Where in the World is Population Growth Bad?, Jeff Kling and Lant Prichett, World Bank, 1995.
“Population, Factor accumulation and Productivity,” Lant Prichett, World Bank Working Papers, September 28, 1994.