The population of a country and its economic growth is closely interlinked with the attainment of economic development; a country must consider its human resources both from the angle of assets and liabilities. That proper utilization of natural endowments and the level of production of national wealth depend very much on the extent and efficiency of human resources, but too much of population will again eat up all the fruits of developments.
From the point of view of economic welfare it is quite essential to study human resources in detail at the same time it should be stressed human beings are the vital instruments of production. The fruits of all economic activities are rested on the betterment of conditions of living of human being. The human resources are playing a vital role in attaining economic development of country. The economic development of country involves proper utilization of its physical resources by its labor force and other forms of manpower, thus it involves achievement of 3 conditions.
- An increase in the per capita income to raise the level of living of the people.
- A fall in the magnitude and rate of unemployment.
- A consequent reduction is the number of people lying below poverty line.
Population Growth as a Source of Economic Development
The growing population can definitely stimulate the economic growth under the three following conditions;
- If the labour supply is scarce in relation to natural and capital resources of the country.
- If the economy can flourish in the world trade
- If the social attitudes are in favour of turning hardships into opportunities.
The following are some of the important arguments in favour of the view that population as conducive factors for economic growth:
- Increase in Investment: Increase in the size of population enlarges the scope of investment in an economy as a result of growing requirements for maintaining a growing size of population. J.M. Keynes is also of the opinion that with the increase in the rate of growth of population, the volume of investment also increases
- Increase in production: Increase in the size of population can enlarge the production base of the economy. The increase in size of population enlarges the scope of division of labour which in turn results large scale production, reduces cost of production and prices and expands market. In many under developed countries of Latin America and Africa, total number of labourers available is comparatively less to that of its available land and other natural resources. Naturally, increase in the size of population of these countries would promote production through better exploitation of its available land and other resources.
- Supply of Labor and Economic development: Increase in the size of population can pave the way for increasing supply of labour. Availability of skilled labor is an important determinant of economic development. This will in turn raise the pace of capital formation and economic development as well.
- Population as a source of capital formation: Disguised unemployment prevailing in an over populated country can be a potential source of capital formation. Similarly, surplus labourers in the rural sector can be shifted to industrial sector at a low subsistence wages. All these would lead to considerable amount of capital formation through cost saving devices.
- Increased labour productivity and economic growth: Human capital formation can pave the way for economic growth by raising the productivity of labourers. Kendrick was rightly observed that increased labour productivity has contributed considerably to the higher rate of economic growth in America.
- Increasing population and expansion of market: Increase in the size of population can pave the way for expanding the size can pave the way for expanding the size of market. That with increase in size of population in a country domestic market expands, businessman become more secured and with its sense of optimism gathered momentum along with slowly rising price level.
- Rising population and increase in demand: With the increase in size of population of a country consumption demand increases leading to increases leading to increased scale of production and diversification of production pattern to meet such demand.
- Raising population and growing talents: With the increase in the size of population, the number of talents like entrepreneurs, engineers, scientists, etc. started to increase which will lead to extension of science, knowledge invention and innovations.
Limitation of Population Growth to Economic Development
By rapidly growing of high population retards the process of development of the country as under the following;
- As increase in population leads to decrease in per capita income.
- Rapidly growing population in a country can create serious food crises.
- Burden of high proportion of unproductive consumers.
- More population creates unemployments.
- Population creates expensive and unavailability of education, housing and medical care.
- High population reduces in capacity to save and invest.
- High population creates wastage of human resources.
Significant Populations Trends
- Developed world population declining
- Less developed countries population is increasing
- Median age is increasing
- Life expectancy is increasing
- Population under 15 years: 30%
- Population over 65 years: 10% and increasing
- Increasing urbanization