O Level Economics 2281 - Topic: Population

POPULATION
Economics 2281
By Hasan Razi

CONCEPTS / DISTRIBUTIONS
• Age and Sex Distribution:
Age distribution refers to the classification of
the population into different age groups e.g.,
below school leaving age (0-14); the working
age group (15-60); and those above retirement
age (60 and above). Sex distribution on the
other hand, means a classification of the
population by the number of males and
females in a country.
By Hasan Razi

• Geographical Distribution:
Geographical distribution of population refers to
the classification of the location of population
within a country
The population tends to be concentrated in
industrial or mining areas, towns, cities and other
urban areas where there are more job
opportunities, while inaccessible areas like
mountainous regions, deserts and areas with
fewer job opportunities will have low population
density.
By Hasan Razi

• Occupational Distribution
Occupational distribution means the
classification of population by type of
occupation, e.g., primary sector, secondary
sector and tertiary sector.
By Hasan Razi

CONCEPTS
• Working population
Working population refers to members of the
population who are willing and able to work
and who are currently employed, such as those
between the age of 15—60. Depending
population refers to members of the
population who cannot support themselves
and are dependent on others, e.g., babies,
children below the age of 14 and the elderly
above 60 years of age.
By Hasan Razi

CONCEPTS
• Optimum Population
Optimum population is that level of population
which, when combined with the other factors
of production, i.e., land, capital and enterprise,
gives the maximum output of goods and
services per head of population.
By Hasan Razi

OPTIMUM LEVEL OF POPULATION
• Average output is maximum at this level of population
• Below this level country is said to be under populated
• A greater population than this level represents over
population
• It is the most efficient level of population because it
gives maximum output per head.
• It also gives the highest per capita income.
By Hasan Razi

TABLE TO UNDERSTAND OPTIMUM LEVEL OF
POPULATION
Size of
population
(Millions)
Total output
(Millions of
units)
Average output
(Units)
10 80 8.00
20 180 9.00
30 350 11.66
45 540 12.00
50 580 11.66
60 620 10.33
70 680 9.71
80 700 8.75
By Hasan Razi

GRAPH TO UNDERSTAND OPTIMUM LEVEL OF
POPULATION (DIAGRAM 1.1)
0
2
4
6
8
10
12
14
10 20 30 45 50 60 70 80
Average Output
By Hasan Razi

SIZE OF POPULATION
Size of population depends upon following things:
1. Birth rate
2. Death rate
3. Net migrations
By Hasan Razi

SIZE OF POPULATION
1. Birth rate
The birth rate refers to the number of live births per 1000
of the population per year. Its calculation is explained
below. For example, suppose that the total population of
a certain country is two million and the number of new
babies born is 4000 in one year.
By Hasan Razi

SIZE OF POPULATION
1. Birth rate
𝐵𝑖𝑟𝑡ℎ 𝑅𝑎𝑡𝑒 =
𝑁𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑏𝑖𝑟𝑡ℎ𝑠
𝑇𝑜𝑡𝑎𝑙 𝑝𝑜𝑝𝑢𝑙𝑎𝑡𝑖𝑜𝑛
× 1000
By Hasan Razi

SIZE OF POPULATION
1. Birth rate
A country is said to have a high birth rate if its birth rate
figure is 30 or higher per 1000. Indonesia falls into this
category. A birth rate of 20 – 30 per 1000 is considered a
medium rate. Thailand is in this category. A birth rate
below 20 per thousand is considered low. Singapore is
one such example.
By Hasan Razi

SIZE OF POPULATION
Reasons of high birth rate in less developed economies.
1. The birth rate is high due to the following reasons:
2. 1. Lack of birth control or family planning.
3. 2. With high infant mortality rates, parents tend to produce
more in the hope that several will live.
4. 3. Parents produce more because many children are needed
to work on the land.
5. 4. Religious beliefs that encourage large families and
discourage family planning.
By Hasan Razi

SIZE OF POPULATION
Reasons for falling birth rate in developed economies.
1. Family planning, availability of contraceptives, sterilization,
abortion and other government incentives.
2. A low infant mortality rate putting less pressure on families to
have more children.
3. Increased industrialization and mechanization so that a smaller
work-force is needed.
4. More educated people who are aware of the opportunity cost of
having more children.
5. An increased incentive for smaller families.
6. Increased desire for material possessions such as cars, holidays,
bigger homes and a lesser desire for large families.
7. Emancipation of women, enabling them to develop their own
careers rather than being solely child bearers.
By Hasan Razi

SIZE OF POPULATION
Death Rate:
The death rate refers to the number of deaths per year per
1000 of the population. If the total population of country is
3,000,000 and the number of deaths in one year is 12,000.
By Hasan Razi

SIZE OF POPULATION
Death Rate:
𝐷𝑒𝑎𝑡ℎ 𝑅𝑎𝑡𝑒 =
𝑇𝑜𝑡𝑎𝑙 𝑛𝑢𝑚𝑏𝑒𝑟𝑠 𝑜𝑓 𝑑𝑒𝑎𝑡ℎ𝑠
𝑇𝑜𝑡𝑎𝑙 𝑃𝑜𝑝𝑢𝑙𝑎𝑡𝑖𝑜𝑛
× 1000
By Hasan Razi

SIZE OF POPULATION
Death Rate
• A death rate that is higher than 20 per 1000 is considered
high. Cambodia is one such country.
• A death rate of 10–20 per 1000 is considered a medium rate,
such as Sri Lanka.
• A death rate below 10 per 1000 is considered to be a low rate
Japan falls under this category.
By Hasan Razi

SIZE OF POPULATION
Reasons for high death rate in LDC’s
• Diseases and plague.
• amine, uncertain food supplies and poor nutrition.
• Poor hygiene, lack of clean drinking water and proper sewage
disposal.
• Lack of medical facilities such as hospitals, doctors and
medicines.
By Hasan Razi

SIZE OF POPULATION
Reasons for falling death rate in DC’s.
• Availability of better medical facilities.
• Improved sanitation and water supply.
• Improvements in food production, in terms of quality and
quantity.
• Better transportation facilities so that food and medicine is
available in all parts of the country.
• A drop in child mortality rate.
• A rise in overall literacy rate.
By Hasan Razi

SIZE OF POPULATION
Net migration.
Net emigration means that more people emigrate (leave) than
immigrate (arrive). Net immigration means that more people
immigrate than emigrate.
Net migration depends upon:
• Relative job-opportunities home and abroad.
• Political reasons.
• Religious reasons.
• Taste/personal preferences.
By Hasan Razi

SIZE OF POPULATION
Natural increase
Natural increase in population refers to the difference between
the birth rate and the death rate. It could be positive or
negative, depending on whether the birth rate is greater than
the death rate or otherwise.
Natural increase in population in a country = Birth rate – Death rate
By Hasan Razi

SIZE OF POPULATION
• A natural increase in population is said to occur if the birth
rate is higher than the mortality rate (death rate).
• This is due to early marriages, a young population and a large
number of women of childbearing age.
• A natural decrease in population takes place if the death rate
is greater than the birth rate.
• Total (or actual) increase in population of a country refers to
the total increase in the population of a country in a year due
to natural increase plus net migration. Thus, it is equal to:
Natural increase for entire population +Immigration - emigration
By Hasan Razi

SYLLABUS CONTENT
By Hasan Razi

EFFECTS OF AN INCREASING POPULATION
• Whether an increase in the size of a population brings economic
advantages or disadvantages depends very much on the size of
the existing population in relation to the availability of other
economic resources.
• When there is excess of births over deaths, there will be an
increase in the numbers in the dependent age group.
• A high dependency ratio is adverse to economic development
because the resources needed to care for children and educate
them could have been used for industrial investment and training
purposes.
• An expanding population will create increased demand for goods
and services which in turn will lead to increase in investment and
higher employment, thus resulting in economies of scale in
production and fuller utilization of the infrastructure of the
economy.
By Hasan Razi

ADVANTAGES OF AN INCREASING POPULATION
• Increase in population towards the optimum size will lead to a
better use of resources
• It will lead to an increase in national income per head.
• If the increase is due to a higher birth rate, there will be more
young people.
• There will be more demand in the economy, leading to an
increase in output, more jobs and more specialization and
economies of scale.
By Hasan Razi

DISADVANTAGES OF AN INCREASING POPULATION
• If the increase in population results in a population that is
larger than the optimum, there will be a strain on existing
resources.
• national income per head will fall.
• If the increase is due to a lower death rate, the larger number
of old people will put a strain on taxpayers who have to
support them with pensions.
• More food and raw materials will have to be imported which
may worsen the balance of payments.
• Demand for services like education, healthcare and roads will
also increase.
By Hasan Razi

EFFECTS ON AN OVER-POPULATED COUNTRY
• Low per capital GNP.
• Malnutrition.
• Shortage of housing and social welfare facilities.
• Lack of food.
• Unemployment.
• Traffic congestion.
• Air, water and land pollutions.
• Housing and slum problems.
• Health hazards.
• Lack of educational facilities.
By Hasan Razi

EFFECTS ON AN OVER-POPULATED COUNTRY
• Fewer saving as most income are spent on consumer goods,
meaning that there is little left for investment, thereby
resulting in a low standard of living.
• Poorly balanced age structure with a disproportionate
percentage of people less than 15 years of age. This in itself
implies a large number of future births which suggests high
unemployment rates in future.
By Hasan Razi

MEASURES TO REDUCE PROBLEMS OF OVER-POPULATION
i. Legalization of abortion, while contraceptives and other
devices are provided freely or cheaply.
ii. Material incentives such as money or clothes are given
and there is much education and publicity on family planning.
iii. Emigration is encouraged i.e., sending people to other
countries where the population is smaller.
iv. Increase in output o food by using improved seeds and
strains o crops, more and better fertilizers and faming
methods.
By Hasan Razi

MEASURES TO REDUCE PROBLEMS OF OVER-POPULATION
v. Advanced technologies are introduced in almost all
sectors of production rather than remaining an agricultural
country.
vi. Industrial development is encouraged by offering special
privileges to pioneer industries in the form of tax relief, loans
and subsidies.
By Hasan Razi

AGEING POPULATION
What is an Ageing Population?
• An ageing population comes about when the average age per
person rises. This is a common problem of advances
countries. The population pyramids of such countries have a
bulge near the apex. This shows that the proportion of
surviving old age is relatively large.
By Hasan Razi

CAUSES OF AGEING POPULATION
1. Medical advancement has controlled many diseases.
2. The availability of pesticides and insecticides have led to a
decline in disease-carrying pests.
3. Sanitation and sewage facilities have improved.
4. Better water supply.
5. Improved housing and living conditions.
6. People have a greater knowledge of hygiene.
7. People are more aware of the need for proper nutrition
and exercise.
By Hasan Razi

EFFECTS OF AGEING POPULATION
1. An ageing population is likely to result in an increase in the number
of retired people. People who have retired are economically inactive and
are classified as dependents.
2. The old age dependency ratio will increase. Developed countries
have a high average age with less than 25% of the population under 15
years of age.
3. The elderly will draw a pension and will make more demands on
health and social services. These services will have to be provided by the
working population between 16 to 65 years of age. Ultimately, the govt
may adopt any or all of the following policies to curb this problem:
a) Delay pensions until age 70 to 75.
b) Cut back on state health and social services to decrease life
expectancy.
c) Increase the taxes of the working population to support these
people.
By Hasan Razi

EFFECTS OF AGEING POPULATION
4. With a high level of unemployment among the elderly, the
future does not look very bright for the economy.
5. Pattern of production is also affected. Countries with an
ageing population like France require an increase production of
related products such as nursing homes, hospitals and the like.
6. Labour immobility.
By Hasan Razi

POPULATION PROBLEMS FACED BY DEVELOPED COUNTRIES
Ageing population:
Small work force.
Rural depopulation.
Urbanization which causes the following problems.
• Pressure on transportation, water supply, sewage and refuse
disposal.
• Smoke and chemical emission from factories.
• Traffic congestion and noise pollution.
• Higher incidences of mental illness due to tension and stress.
By Hasan Razi

POPULATION PYRAMIDS
• A population pyramid is the most popular way of presenting
age and sex distribution of a population in a country.
• It shows the percentage of males and females in different age
groups.
• The information is presented in the form of a bar graph (also
known as population pyramid)
• a population pyramid is the result of birth rate, death rate,
immigration and emigration of the population.
By Hasan Razi

POPULATION PYRAMIDS
• In a pyramid, the length of each bar shows the number of
people in that particular age group.
• A country with high birth and death rates will have a large
percentage of young people in its population.
• This is found in developing (poor) countries where as a result,
the expectancy of life will be low while the dependency ratio
will be high.
• In developed countries, dependency ratio will be low,
mortality as well as birth rates will be low, while life
expectancy will be high.
By Hasan Razi

POPULATION PYRAMIDS
• An economist is interested in knowing the age distribution of
a country because it shows the number and proportion of the
working and non-working age groups.
• The higher the dependency ratio is, the lower the standard of
living of a country will be and vice versa.
• A country with a high birth rate and high death rate will have
a large population of young people in its population, while a
country with low birth rate and low death rate as is the case
with developed countries will have a large population of old
people.
By Hasan Razi

POPULATION PYRAMIDS (DIAGRAM 1.2)
By Hasan Razi

By Hasan Razi

DEPENDENCY RATIO
• Dependency ratio is the term used to show the number of
people supported by one person in the work-force.
• For example, a dependency ratio of four means that every
person who works, supports four other persons who are not
working.
• People in the work-force produce goods not only for
themselves but also for people who are not working.
• The dependent population comprises the very young, school
children, students, housewives, the unemployed and old age
pensioners.
By Hasan Razi

DEPENDENCY RATIO
• Any increase in these groups of people means that the people
who work have more people to support, which will in turn
mean that the living standards of most of the people will fall.
• It can be calculated by using following formula:
𝐷𝑒𝑝𝑒𝑛𝑑𝑒𝑛𝑐𝑦 𝑟𝑎𝑡𝑖𝑜 =
𝐷𝑒𝑝𝑒𝑛𝑑𝑒𝑛𝑡 𝑝𝑜𝑝𝑢𝑙𝑎𝑡𝑖𝑜𝑛
𝑊𝑜𝑟𝑘𝑖𝑛𝑔 𝑝𝑜𝑝𝑢𝑙𝑎𝑡𝑖𝑜𝑛
By Hasan Razi

DEPENDENCY RATIO
• The dependent population means people below 15 and
above 60 years of age as shown by the shaded areas in
diagram (1.2).
• The working population means people above 15 and below
60 years of age. The population pyramid shows the
population structure of a certain country. Looking at diagram
(1.2), the dependency ratio is calculated as follows:
%𝑎𝑔𝑒 𝑜𝑓 𝑝𝑒𝑜𝑝𝑙𝑒 𝑖𝑛 𝑎𝑟𝑒𝑎 𝑍 + %𝑎𝑔𝑒 𝑜𝑓 𝑝𝑒𝑜𝑝𝑙𝑒 𝑖𝑛 𝑎𝑟𝑒𝑎 𝑋
%𝑎𝑔𝑒 𝑜𝑓 𝑝𝑒𝑜𝑝𝑙𝑒 𝑖𝑛 𝑎𝑟𝑒𝑎 𝑌
By Hasan Razi

%𝑎𝑔𝑒 𝑜𝑓 𝑝𝑒𝑜𝑝𝑙𝑒 𝑖𝑛 𝑎𝑟𝑒𝑎 𝑍 + %𝑎𝑔𝑒 𝑜𝑓 𝑝𝑒𝑜𝑝𝑙𝑒 𝑖𝑛 𝑎𝑟𝑒𝑎 𝑋
%𝑎𝑔𝑒 𝑜𝑓 𝑝𝑒𝑜𝑝𝑙𝑒 𝑖𝑛 𝑎𝑟𝑒𝑎 𝑌
By Hasan Razi

CHARACTERISTICS OF POPULATION PYRAMID OF DEVELOPING
COUNTRIES.
1. It has a broad base because of a high number of young
dependents below the age of 15 as shown in diagram (1.3), and
tapers towards the top. A broad base is due to a high birth rate.
2. It has a bigger number of young people compared to old
people.
3. The proportion of males and females is almost same.
4. People in the older age group support a large number of
young dependents i.e., high young dependency ratio.
5. The proportion of economically active persons i.e.,
working age group is relatively smaller than a developed
country’s.
By Hasan Razi

CHARACTERISTICS OF POPULATION PYRAMID OF LESS DEVELOPING
COUNTRIES.
1. The base is less broad because of fewer young people i.e., fewer
young dependents below the age of 15 as shown in diagram (1.3), and a
broad bulge towards the top. A narrow base is due to a low birth rate.
2. There are more old people compared to young.
3. The proportion of males and females is about the same.
4. People in older age group do not have to support a large number of
young dependants i.e., high old age dependency ratio.
5. The proportion of economically active i.e., working age people is
relatively larger than a developing country’s.
6. It has a smaller dependent population.
7. It shows a higher life expectancy.
8. Since the birth and death rates are falling, the population size
remains almost the same and the average age increases.
By Hasan Razi

Characteristics of less developed countries OR differences between LDC’s & DC’s
ECONOMIC INDICATORS
1. Low per capita income.
2. High unemployment rate
3. Balance of payments deficit
4. Budget deficit
5. High inflation rate
By Hasan Razi

DEMOGRAPHIC INDICATORS
1. Young population
2. High birth rate
3. Falling death rate
4. High dependency ratio
By Hasan Razi

SOCIAL INDICATORS
1. Low life expectancy
Most developing countries have relatively low life expectancy.
People in Afghanistan are expected to live to the age of 50 only, as
compared to Japan, a developed country, where they can be
expected to live to 80 years old.
2. Low literacy rate
Developing countries have a low literacy rate, as low as 40% for
countries like Pakistan and Bangladesh. Generally, there is still a
high proportion of the population who cannot read and write in
their own language. In contrast, for developed countries like Japan
and the UK, literacy rate is almost 100%.
3. Human and physical resources
By Hasan Razi

QUESTIONS & ANSWERS
By Hasan Razi

O Level Economics 2281 - Topic: Population

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