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Population Growth

Population Growth

When you think of economics, what is the first thing that comes to your mind? Perhaps supply and demand, growth, or even production may come to mind. While there is no wrong answer, population growth is an important economics topic that you may not often think about! In fact, it affects the economics topics you were probably thinking about in some way. Continue reading to learn more about population growth and its effects on the economy!

Population Growth Definition

Population Growth can be defined as the increase in the number of people in a given area. Population growth can be measured in a neighborhood, country, or even global level! You can imagine how difficult it may be for each country to accurately count its population. The United States counts its population with a census — an official count of the population in the country. The census occurs once every 10 years and provides valuable information for the United States government.

Initially, the census was used to allocate the proper amount of representatives that each state gets elected to Congress. Now, the census is used for a variety of reasons that can include planning infrastructure, distributing government funds, and drawing district lines. The population has grown quite a bit since the United States was founded — but the rate of growth has declined. The 1800s saw a growth rate of about 3% each year. Today, that number is 1%.1

Population growth is the increase in the number of people in a given area.

Census is the official count of the population in the country.

Population Growth, Times Square full of people, StudySmarterTime Square, pixabay

Factors Affecting Population Growth

According to demographers — people who study the growth, density, and other characteristics of the population — there are three major factors that affect population growth. These factors are fertility rate, life expectancy, and net immigration levels. Let's take a look at each one individually to get a better understanding of their impact on population growth.

Factors Affecting Population Growth: Fertility

The Fertility Rate is the number of births that 1,000 women are expected to go through in their lifetime. For example, a fertility rate of 3,500 would be equivalent to 3.5 kids per woman. The fertility rate is often compared to the number of deaths in a given year to get the replacement rate — the rate at which the number of births offsets the number of deaths.

If the United States has a high fertility rate, then the population growth will increase accordingly unless it is offset by the death rate. In the past, the United States had a higher fertility rate than it does today. The high fertility rate in the past can be attributed to families needing more children to add to family income. This rate has decreased in recent times since the need for young children to work has decreased.

The Fertility Rate is the number of births that 1,000 women are expected to go through in their lifetime.

Factors Affecting Population Growth: Life Expectancy

Life Expectancy is the average lifespan that a person will reach. In the United States, life expectancy has grown over time — developments such as medical advancements and safer working conditions have contributed to this. The greater the life expectancy, the larger the population will grow; the lower the life expectancy, the less the population will grow. Life expectancy can be impacted heavily by external factors such as genetics, lifestyle, and crime rate.

Life Expectancy is the average lifespan that a person is expected to reach.

Factors Affecting Population Growth: Net Immigration

The Net Immigration Rate is the total change in population from people moving in and out of the country. In the United States, the net immigration rate tends to be positive — more immigrants come in than leave the United States. If a country were to have a negative net immigration rate, then more immigrants would be leaving the country than coming in. A positive net immigration rate will contribute to higher population growth, whereas a negative net immigration rate will contribute to lower population growth. The net immigration rate can be impacted by external factors such as the government's immigration policies and regime.

The Net Immigration Rate is the total change in population from people moving in and out of the country.

Population Growth Types

Let's go over the different population growth types. There are two different types of population growth: exponential and logistic.

Population Growth Types: Exponential

Exponential growth rate is growth that increases rapidly with passing time. In a graph, exponential growth increases upward and has a "J" shape. Let's take a look at a graph:

Population Growth, Graph Exponential Growth, StudySmarterFigure 1. Exponential growth, StudySmarter Originals

The graph above shows us what exponential growth looks like over time. Population size increases by a larger amount with each passing year. The result is a "J" shaped curve with a rapidly increasing population growth rate.

Population Growth Types: Logistic

Logistic growth rate is growth that slows down with passing time. In a graph, logistic growth rate increases and then flattens out, resulting in an "S" shaped curve. Let's take a look at a graph below:

Population Growth, graph Logistic Growth, StudySmarterFigure 2. Logistic growth, StudySmarter Originals

The graph above shows us what logistic growth looks like over time. Population growth initially increases, then levels out after a certain point in time. The result is an "S" shaped curve and a slower population growth rate.

Population Growth and Economic Growth

Population growth and economic growth are closely related to one another. For example, productivity is an important factor in economic growth. How might productivity be important to population growth?

A greater population means that there is a larger workforce. A larger workforce means that there is potential for higher productivity to produce more goods — this results in greater output (GDP)! Not only is there a greater supply of workers, but there is also a greater demand for goods and services as well. Greater demand and supply will lead to an increase in overall economic growth.

The opposite can also be true. A greater population may not result in a larger workforce. The problem? There are more people demanding more goods without the proper supply of them — the low supply is due to the low workforce. As opposed to our previous example, this is not good for economic growth and can lead to many problems due to scarcity.

Population Growth, Red and green arrows in front of a bar chart illustration where the red arrow going into the ground and the green is going up, StudySmarterEconomic Growth and Decline, pixabay

Population Growth's Economic Effects

Population growth will have many economic effects — both positive and negative.

Let's first take a look at population growth's positive economic effects.

Population Growth's Economic Effects: Positive Effects

Greater population growth can result in economic growth. More people in a country means that there is more access to labor; more access to labor results in more goods being produced and demanded — resulting in economic growth! More people in a country will also result in higher tax revenues for the government. The government can use the increased tax revenue on building infrastructure or improving welfare programs. Lastly, a higher population increases the probability of innovation in the free market.

Population growth's positive economic effects are clear — more people can yield more output, tax revenue, and innovation in the market. With these outcomes, why wouldn't a country push for high population growth?

Let's now take a look at population growth's negative economic effects.

Population Growth's Economic Effects: Negative Effects

Greater population growth may exacerbate the problem of resource scarcity. If a country is barely providing resources to its current population, what will happen if there is an exponential growth in population? People will not be able to access resources since there will be too many people demanding too few resources. Population growth can also put pressure on certain areas where people migrate to, such as cities. Cities tend to have more people living in them as opposed to rural areas; as such, cities can become overburdened with too many people living in them. Traffic congestion and pollution are often problems in these areas.

As you can see, there is much to consider when it comes to the economic effects of population growth. There is no clear economic outcome with population growth as no two countries are the same.

Population Growth Problem

Thomas Malthus famously had a theory on the dangers of exponential population growth. Malthus believed that population growth was always exponential and food production was not — leading to humans being unable to survive and eventually causing population growth to slow down. This theory was proven incorrect since technology has played a large role in increasing production for an increasing population.


Population Growth - Key takeaways

  • Population growth is the increase in the number of people in an area.
  • Census is the official count of people in a country.
  • The three factors affecting population growth are: the fertility rate, life expectancy, and net immigration rate.
  • The two types of population growth are exponential and logistic.
  • Population growth has both negative and positive economic effects.

References

  1. Our World in Data, Population, 1800-2021, https://ourworldindata.org/grapher/population-since-1800?time=earliest..latest&country=~USA

Frequently Asked Questions about Population Growth

The meaning of population growth is the increase in the number of people in a given area.

The three factors that affect population growth are fertility rate, life expectancy, and net immigration. 

Economic growth affects population growth by either adapting to the population growth or impeding future growth.

The four effects of population growth are economic growth, increased tax revenue, scarcity, and environmental impacts.

Exponential and logistic growth.

The relationship is not conclusive. Population growth can cause economic development; economic development can cause population growth.

Final Population Growth Quiz

Question

What is population growth?

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Answer

Population growth is the increase in the number of people in a given area

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Question

What is a census?

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Answer

A census is the official count of the population in the country.

Show question

Question

What are the 3 factors that affect population growth?

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Answer

The three factors that affect population growth are fertility rate, life expectancy, and net migration. 

Show question

Question

What are the two types of population growth?

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Answer

Exponential and logistic growth.

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Question

What is the fertility rate?

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Answer

The fertility rate is the number of births that 1,000 women are expected to go through in their lifetime.

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Question

What is life expectancy?

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Answer

Life expectancy is the average lifespan that a person will reach.


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Question

What is the net immigration rate?

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Answer

The net immigration rate is the total change in population from people moving in and out of the country.


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Question

What do demographers study?

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Answer

Demographers study the growth, density, and other characteristics of the population

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Question

True or False: population can cause positive AND negative effects on the economy?

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Answer

True

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Question

True or False: the fertility rate is more important to population growth than the net immigration rate.

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Answer

False

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Question

Which of the following is a positive economic outcome of population growth?

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Answer

More access to labor

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Question

Which of the following is a negative economic outcome of population growth?

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Answer

Pollution

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Question

In the United States, how often does the census occur?

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Answer

10 years

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