Edco Positive Economics Chapter on Population Definitions and Trends

© Edco 2012. Positive Economics
Chapter 26

Economic Population Definitions
 Demography is the statistical study of human
population.
 A country is under-populated when an increase
in the population causes an increase in the average
income per head under given economic resources.
 A country is overpopulated when an increase in
population causes a decrease in the average
income per head under given economic resources.
 Optimum population is when the average
income per head is at its highest possible level
under given economic resources.

Economic Population Definitions cont.
 Birth rate is the average number of live births
per 1,000 people per year.
 Fertility rate is the number of live births in a
geographic area in a year per 1,000 women of
childbearing age.
 Total fertility rate is the average number of
babies born to women during their reproductive
years.

Difference in Fertility between Developed and
Developing Nations
Developed Countries
 Many women opt to concentrate on their careers rather than have
children.
 Increasing sexual equality means that women have more control over
their own fertility.
 It is often viewed that children are very expensive to rear and educate.
 A vital factor is that there is a ready availability of contraception and
family planning advice.

Difference in Fertility between Developed and
Developing Nations cont.
Less Developed Countries
 Many parents have a lot of children in the expectation that some will die
because of a high infant mortality rate in their region.
 Children are viewed as essential in families because they contribute to
household income, either by way of government support or
employment.
 There may be a shortage of family planning facilities and advice.

 Infant mortality refers to the number of children out of every
1,000 born alive who die on or before their first birthday.
 Death rate is the average number of deaths per 1,000 people
per year.
 There are a number of factors that contribute to this, including:
– Dirty and unreliable water supplies
– Poor housing conditions
– Poor access to medical services
– Endemic disease in some countries
– Diets that are short in calories and/or protein
Factors that Contribute to the
Death Rate

 Life expectancy is the number of years, based on
statistical averages, that a given person of a specific age,
class or other demographic variable may be expected to
continue living.
 Density of population is the average number of people
per square kilometre.
Total population of a country
Total land area of a country
 Dependency ratio:
Number of people aged under 15 and over 65
Number of people aged between 15 and 65

 Net migration is the difference between
outward migration (emigration) and
inward migration (immigration) during a
period of time.
 Emigration: Irish citizens leaving Ireland
and moving to live abroad.
 Immigration: Citizens of other countries
entering Ireland to live.
Migration Definitions

Push forces
 High levels of unemployment
 Low wage rates
 Lack of promotion opportunities
 Poor social infrastructure
 Political instability
 Religious persecution
 Desire to seek new experiences and employment
outside of one’s native homeland
Factors that Influence Migration

Pull forces
 Employment opportunities
 Higher wages
 Better standard of living
 Job experience
 Greater political stability abroad
 A more attractive climate
 The desire to broaden one’s outlook on the world
Factors that Influence Migration cont.

Economic Consequences of
an Increase in Emigration
 Higher dependency ratio
 Opportunity costs
 ‘Brain drain’
 Smaller domestic market
 Demand for state services
 Unemployment reduced
 International connections
 Upward pressure on Irish wage levels
 A reduction in social costs
 Loss of potential investment

Economic Consequences for a Country
Experiencing Increased Immigration
 Increased demand for goods and services
 Government revenue increases
 Reduction in labour shortages
 Greater utilisation of services
 New skills/traditions within society
 Pressure on provision of state services

Economic Consequences for a Country
Experiencing Increased
Immigration cont.
 Increased pressure on infrastructure
 Exploitation of immigrants
 Dependency ratio changes
 Resentment/racism
 Land and property values increase

 An ageing population is defined by a
population who:
– Is living longer
– Has an average lifespan that is increasing
– Has a growing percentage of the population
who are in an older age bracket
Characteristics of an
Ageing Population

 Pressure on the provision of state pensions
 Increased tax burden
 Increased government expenditure
 Changing pattern of demand
 The participation rate falls
 Reduced mobility of labour
Possible Economic Effects of an
Ageing Population on the Irish Economy

Thomas Malthus (1766–1834)
 He thought population growth could be
halted by positive checks on population.
 His predictions on population growth did
not materialise due to improvements in
agricultural technology, which made land
more productive, and the slowdown in the
rate of population growth in developed
countries.

Thomas Malthus (1766–1834) cont.
 His iron law of wages/subsistence
wages theory stated that any wages paid to
workers in excess of the subsistence level
would cause an increase in population. This
would in turn lead to a growth in the supply
of labour, which would lead to a fall in the
wage rate. This fall in the wage rate would
lead to a decrease in population and move
wages up to subsistence level.

 The census is the official
count of the nation’s people
and a compilation of
economic, social and other
data. It is used by the
government in the
formulation of development
policies and plans.
The Census

 Demographic changes
 Infrastructural requirements
 Planning and the provision of essential services
 Regional policy
 Pension planning
 Future levels of consumer demand
 Labour market
 Profiling of the population
Economic Uses for a Census of
Population in Ireland

Edco Positive Economics Chapter on Population Definitions and Trends

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