“Julian Simon and the Population Growth Debate” by Dennis A. Ahlburg, “A Cross-Section Model of Economic Growth” by Paul M. Sommers and Daniel B. Suits, and “A Simple Cross-Section Model of Economic Growth Stands the Test of Time” by Sandeep K. Gupta and Paul M. Sommers present an alternate view of the relationship between population and economic growth, one that suggests only a minor negative correlation, not a complete reverse relationship. Ahlburg, by analyzing the thought of population economist Julian Simon, presents a moderated view of Simon’s optimism on population growth. Sommers, Suits, and Gupta present a quantitative analysis suggesting that population growth is harmful to developing economies, but not by much.
Ahlburg analyzes Julian Simon as a thought provoking, albeit somewhat incorrect, analyzer of population trends and their effect on growth. He credits Simon for shifting the American academia away from neo-Malthusian pessimism toward a more moderate stance on population growth. Simon’s findings, Ahlburg argues, do lead one to question the neo-Malthusian doctrine, yet are not sufficient to outright reject it (Ahlburg, 319). Simon’s optimism was primarily based on a simulated model of population and economic growth. Drawing conclusions from this model, Simon argued that population growth produces better economic performance in the long run, in 120 to 180 years. A stationary population does perform better in the short run, for up to sixty years. A declining population, however, may be disastrous for economic growth in the long run (Ahlburg 318).
Another aspect of Simon’s argument was a moral criticism of population control. Although economists in general shy away from moral arguments, Simon argued that life itself has inherent value, and any discussion on the topic that excluded ethics was incomplete. The crux of Julian Simon’s message is that growth is fundamentally fueled by “skilled, spirited, and hopeful people (Ahlburg 322).” A larger population both increases the production of knowledge and then provides the consumers to fuel incentives for further production of knowledge. It is this creation of knowledge that Simon believes will discover solutions to problems that would arise from the tandem of higher incomes and higher population (Ahlburg 322). As a final assessment of Simon’s ideas, Ahlburg rejects Simon’s optimism as being excessive, and instead takes a more moderate stance: the bulk of evidence today still points toward a slowing of rapid population growth being beneficial to economic development and growth.
Paul Sommers, first with Daniel Suits and then with Sandeep Gupta, creates a simple, cross-sectional model of economic growth that correlates investment and population to economic growth. Sommers and Suits note a trend in developed countries to invest more in absolute terms as well as in proportion of GNP than less developed nations. Yet at very high per capita incomes, the need to invest has been satisfied, and increasing amounts of per capita income are spent. Sommers and Suits, therefore, present a quantitative argument that suggests a positive correlation between capital investment in GNP and economic growth rates. They do, however, note a negative relationship between population and economic growth. Unlike the relationship between investment and growth, which is very strong, the negative effect on economic growth by an increase in population is relatively minor, with only an increase of 1.5% in GNP being needed to offset a one percent increase in population (Sommers, Suits, 126). Sommers and Suits, despite Gupta and Sommers return to Sommers’ and Suits’ cross-sectional model of 1971 twenty-five years later, test it with new data, and claim that the findings of the earlier model still hold to be true (Gupta, Sommers, 2).
Sommers’, Suits’, and Gupta’s quantitative analysis strengthens the qualitative one done by Dennis Ahlburg: population growth does hurt economic growth, but by a lesser degree than conventional wisdom would dictate.
Dennis A. Ahlburg, "Julian Simon and the Population Growth Debate" in Population and Development Review, June 1998, Vol. 24, No. 2, pp. 317-327.
Paul M. Sommers and Daniel B. Suits, "A Cross-Section Model of Economic Growth" in the Review of Economics and Statistics, Vol. 53, 1971, pp. 121-128.
Sandeep K. Gupta and Paul M. Sommers, "A Simple Cross-Section Model of Economic Growth Stands the Test of Time", forthcoming.