Impact Of Population Growth On The Economy
Population growth exerts a profound influence on economic dynamics, affecting various sectors and facets of a nation’s economic landscape. The demographic expansion entails increased consumer demand, propelling market activity and stimulating production. However, it also strains finite resources, potentially leading to scarcity and price escalation. Moreover, a burgeoning population presents challenges in providing essential services such as healthcare, education, and infrastructure, necessitating significant investment to meet the rising demand. Furthermore, labor market dynamics are influenced, with an expanding workforce offering opportunities for economic growth through increased productivity but also posing challenges such as unemployment and wage pressures. Additionally, demographic shifts impact savings and investment patterns, altering capital accumulation and economic development trajectories. Effective management of population growth entails policies addressing issues of resource allocation, human capital development, and sustainable economic planning to harness the potential benefits while mitigating the challenges posed by demographic expansion.
CHAPTER ONE
1.0 INTRODUCTION
1.1 The Background Of The Study
1.2 Statement Of The Problem
1.3 Objective Of The Study
1.4 Statement Of The Hypothesis
1.5 Significant Of The Study
1.6 Scope Of The Study
1.7 Limitation Of The Study
CHAPTER TWO
2.0 LITERATURE REVIEW
2.1 Theoretical Literature
2.1.1 Theories 0f Population Growth
2.1.2 The Malthusian Theory
2.1.3 The Marxist Theory Marx
2.1.4 The Liberal Theorist (Cornucopian)
2.1.5 Factors Affecting Population Growth
2.2 Empirical Literature
2.2.1 Adverse Effects Of Population Growth On Economic Growth Poverty
2.2.2 An Overview Of Theory Of Economic Growth The Factors Behind Economic Growth
CHAPTER THREE
3.1 Research Methodology
3.2 Model Specification
3.2.1 Mathematical Function
3.3 Economic Procedure
3.3.1 Economic Criteria (E C)
3.3.3 Econometric Criteria (Ec)
CHAPTER FOUR
4.0 DATA PRESENTATION AND ANALYSIS
4.1 Presentation Of Result
4.2 Interpretation Of Regression Results
4.2.1 Analysis Of Regression Coefficients
4.2.2 Evaluation Based On Economic A Priori Expectation
4.2.3 Evaluation Based On Statistical Test
4.3 Evaluation Of Hypothesis
CHAPTER FIVE
5.0 SUMMARY, RECOMMENDATIONS AND CONCLUSION
5.1 Summary
5.2 Recommendation
5.3 Conclusion
Bibliography
INTRODUCTION
1.1 THE BACKGROUND OF THE STUDY
The consequences of population growth on the economic development of less developed countries are not the same because the condition prevailing in these countries are quite different from those of developed economy. Therefore the body of literature on population growth in Nigeria has always emphasized either the negative or the positive effect.
Therefore in every discussion, it is conventional to start with a definition of terms used in such discussion. However, population growth can be seen by a demographer as a change in the size of the population. But when this change occurs in such a way that it reduces the size of population, the demographer refers it as a negative growth but when it adds to the size of the population he regards it as a positive one. What we get from this concept is that population growth can be positive or negative depending on whether there is an increase or decrease in the size of a given population. Population whether positive or negative is derived from three demographic variables such as birth, death and migration rates
Udabah (1999) Threw more light on this by adding that birth and death rates in underdeveloped countries are quite different from that of developed countries. Births rate in underdeveloped are generally high, why those of developed countries are low. On the other hand, death rates are higher in underdeveloped nations. The higher rate of population growth is therefore a major characteristic of underdeveloped nations and is partly responsible for the low rates of economic development.
Moreover, the population of any country constitutes the most vital component of its resource base. This aspect is based mostly on its size, growth rate, spatial distribution, demographic structure and quality in terms of level of education, fitness and social welfare. Population statistics are indispensable impute into the planning process in any area. To government issuing programmes for instance in the efforts of government in the developing countries to feed the people and also
provide quality services for them are being frustrated by rapid population growth. This growth is attributable on the one hand to improvement in human survival associated with the application of modern medical science to health matters, better sanitation and immunization of children which have caused the death rate to decrease.
On the other hand, so many socio-cultural issues have complimented the growth of population in Nigeria positively (Lee and Miler 1990, Rennne 1995, Ainsword et al 1996).
Consequently, the world population has been increasing and the last two decades have been demographically unprecedented as it rose from 4.2 billion people in 1985 to 6.4 billion in 2010. Much of this occurred in the developing nations as their population grew from 3.7 billion to 5.1 billion as against that of developed nation which grew from 1.1 billion to 1.2 billion over the same period (United Nation 2001 billion).
Nigerian‟s population is one of the fastest growing population in the world and Nigeria is the most populous country in Africa, ranked the tenths as obtained from two major sources, viz the 1991 census and the Population Reference Bureau World Population Data Sheet.
Obviously, the population of Nigeria is large which makes it a “giant” relative to the other Africa countries. The large population of Nigeria implies a large market for goods and services as well as large pool of human resources for development. However, the impact of population on development depends not only on the absolute size but also on its quality. The major function responsible for the rapid increase in the population of the country is the relatively high fertility level as portrayed by a total fertility rate of about 6.0 life – birth per woman in the 1990‟s
Having seen from theoretical and empirical view that the population growth is an impediment to the economic growth and development especially under developing countries. It is then important to answer this question, how detrimental is population growth to the economic growth? To answer these we look into the interactions between population growth and any of the economic variable such as , population growth, unemployment, savings ,interest, and inflation etc. So in this research work, our demonstration of the impact of population on economic growth will be based on the study of the relationship between population growth, interest, unemployment and inflation. Now the question to answer becomes how those population growth influences unemployment? Since we are working on the impact of population growth on Nigeria, as whose population according the 2006 census was estimated to be at a growth rate of 3%, our limitation of this study would be on the Nigeria GDP (Gross Domestic Product) or GNI (GROSS NATIONAL PRODUCT) versus the population growth rate of Nigeria.
Nevertheless, economic growth is the GDP OR GNI divided by the total population of the whole country. This measures the level of output in the economy. This equation implies that if population is rapidly growing, the economic growth will reduce marginally and people income will also decrease. So according to the finding, GDP can be improved that is GDP per capital by checking the population growth rate through birth control, death rate, migration and some other economic variables and demographic variables.
1.2 STATEMENT OF THE PROBLEM
Fundamentally, growth is an indispensible requisite for the development that is why Nigeria‟s economic growth had continue to dominate the main thrust of government paramount objective more importantly, growth is associated with policies of control population growth because a high population lead to a vicious depletion of a nation‟s financial and material resources. According to CBN (1997) the population growth rate of Nigeria is at an average of 2.83% from 1993 to 1997 as compared to developed country like United States whose population rate is 1.00% on the average. This rapid population growth has efficiently induce wide spread poverty. According to Chege (1992), Nigeria became worst than the early post-colonial period. In the 1980‟s the agricultural sector declined in productivity by 1.3% while population grew by 3.1% thus creating severe food shortage, a fall in capital income, a fall in savings and living standard . Because of this type of situation economic growth been severely retarded and dwarfed.
The above presentation points to the critical stance of the economy and therefore makes a clarion call for adequate measure to control the growth rate of Nigeria‟s population which is at 2.8%per annum. To check this, we require constructive demographic policy approaches that will seriously enlighten citizens of the eminent socio-economic danger of rapid population growth.
1.3 OBJECTIVE OF THE STUDY
1 To find out the relationship between population growth and
economic growth.
2. To examine the impact of population growth on economic growth.
3. To proffer appropriate solution / recommendation to authority in
Charge of managing the economy on how to remedy the situation population growth.
1.4 STATEMENT OF THE HYPOTHESIS
The hypothesis to be used is stated thus:
H0:= The impact of population growth on Nigerian economy is not significant.
H1:= The impact of population growth on Nigerian economy is significant.
H0:= There is no casual relationship between population growth and economic growth.
H1:= There is casual relationship between population growth and economic growth.
1.5 SIGNIFICANT OF THE STUDY
1 It provides information on population trends and their implication
To the policy makers, educators, the media and the concern public
Servant.
2 To ascertain the truthfulness whether population growth impact
Negatively or positively to the economic development. 3 This study will also serve as a reference research work for the
society further studies
1.6 SCOPE OF THE STUDY
This research is macroeconomic in nature and over the trend of population growth rate and economic growth rate in Nigeria from 1980 to 2010 a period of 30 years. The study also focuses on the effects of population growth on economic growth in Nigeria in a bid to analyze the options available to accelerate economic development, taking into cognizance of the fact that other factors outside the sphere of population are also important in the determination of the face of economic growth.
1.7 LIMITATION OF THE STUDY
The utility of this research work is restricted to the exclusive focus on population size and growth.
Impact Of Population Growth On The Economy:
Population growth can have both positive and negative impacts on an economy, and the effects can vary depending on various factors such as the rate of growth, the age distribution of the population, and the country’s economic structure. Here are some of the key ways in which population growth can impact an economy:
- Labor Force Expansion: Population growth can lead to an increase in the size of the labor force. This can be beneficial for economic growth as it can provide a larger pool of workers, which, if properly educated and trained, can contribute to higher productivity and output.
- Consumer Demand: A growing population can create a larger domestic market for goods and services. This can stimulate economic growth as businesses have a larger customer base, leading to increased sales and potentially higher profits.
- Innovation and Entrepreneurship: A larger population can lead to more innovation and entrepreneurship. With a larger pool of potential entrepreneurs and consumers, there may be more opportunities for new businesses to emerge, leading to economic dynamism.
- Economies of Scale: With a larger population, businesses may be able to achieve economies of scale, which can reduce production costs and make goods and services more affordable for consumers.
- Human Capital: Population growth can contribute to a nation’s human capital if there are investments in education and healthcare. A well-educated and healthy workforce can be more productive and innovative, driving economic growth.
However, population growth also presents challenges and potential negative impacts on the economy:
- Resource Scarcity: Rapid population growth can lead to increased demand for natural resources such as water, energy, and food. If resource management is inefficient or inadequate, this can lead to scarcity and higher prices, negatively affecting the economy.
- Infrastructure Strain: A rapidly growing population can strain infrastructure, including transportation, healthcare, and education systems. This can result in congestion, lower productivity, and increased public expenditure.
- Unemployment: If population growth outpaces job creation, it can lead to high unemployment rates, particularly among young people. This can result in social and economic instability.
- Income Inequality: Population growth can exacerbate income inequality, especially if economic opportunities are not distributed evenly. This can lead to social tensions and reduce overall economic well-being.
- Environmental Impact: A larger population can put additional pressure on the environment, leading to issues such as pollution, deforestation, and habitat destruction. These environmental challenges can have long-term economic consequences.
- Aging Population: In some countries, population growth may not be the primary concern; instead, an aging population with a declining birth rate can pose economic challenges, such as increased healthcare costs and a shrinking workforce.
In conclusion, the impact of population growth on the economy is complex and depends on a variety of factors. While moderate population growth can offer economic advantages, it must be managed effectively through investments in education, healthcare, infrastructure, and resource management to maximize its benefits and minimize its negative consequences. Population policies and economic planning should take into account the unique circumstances and challenges of each country or region.