LECCIÓN 3

DEMOGRAPHIC
DYNAMICS OF
THE GROWTH

1
 What skills are going to
acquire in this lesson?

 To acquire the ability to apply the theoretical knowledge world-

wide to the economic reality.
 To formulate and to develop reasonable critics founded on the
chosen subject, providing bibliographical evidence who guarantee
their arguments, developing self-critical personal initiative,
innovating and contributing new ideas.
 To develop the team working ability and to defend the ideas
appropriately.
 Perception and awareness of the social implications of the
strengths and weaknesses of the world economy, with particular
emphasis on the distribution of wealth.

2
 How are we going to organize the lesson?

 Theoretical Framework
 3.1.- Demographic Indicators.
 3.2.- Stages of the Demographic Development. Demographic
Transition.
 3.4.- Current situation and perspectives of the world
population.
 3.5.- Migratory movements.

 Practical exercises:
 Calculate demographic indicators for several countries by
doing an assessment within the theoretical framework
explained in class.

3
 What literature is essential to
prepare the lesson?

BASIC BIBLIOGRAPHY
 BARCENILLA VISÚS, S. (2021): “Demografía y movimientos migratorios”, Alonso,
J. A. (Dir.), Lecciones sobre economía mundial. Introducción al desarrollo de las
relaciones económicas internacionales, Thomson-Civitas, Madrid (chapter 5).

COMPLEMENTARY BIBLIOGRAPHY
• ALONSO, J. A.; GARCIMARTÍN, C.; FILLAT, C. (2021): “Crecimiento económico
y cambio estructural”, Alonso, J. A. (Dir.), Lecciones sobre economía
mundial. Introducción al desarrollo y a las relaciones económicas internacionales,
Thomson-Civitas, Madrid (capítulo 4, epígrafe 7).
• MUÑOZ CIDAD, C. (2003): Estructura económica internacional, 3.ª
edición, Thomson-Civitas, Madrid (capítulo 8).
• LIVI-BACCI, M.
(2006): A Concise History of World Population, Blackwell Publishers.

4
 What websites should we visit?

 http://www.prb.org/
 http:// www.ine.es
 http://www.census.gov/
 http://www.ggdc.net/maddison/

5
LESSON 3

3.1. DEMOGRAPHIC INDICATORS

6
 Demographic Indicators

 Birth Rate
Number of births in a given period of time over the total population of
the same period x1000

 Fertility Rate
Average number of children who would be born to a woman in her
reproductive performance years.

 Mortality Rate
Number of deaths during a determined period over the total
population during the same period X1000.

7
 Demographic Indicators

 Life Expectancy
It is an estimate of the average number of additional years that a
person could expect to live if the mortality rates by specific age for a
given year remained for the rest of his life.
International comparisons generally use Life expectancy at birth: Years
that a newborn can expect to live if the patterns of mortality by age prevailing at the time of his birth
remained the same throughout his life
 Natural Growth Rate
Births minus deaths during a given period of time over the total
population X100.

 Annual Growth Rate

Births minus deaths plus immigrants minus emigrants, during a given
period of time over the total population X100.
8
The Demographic Divide: Niger and Netherlands

9
 The Demographic Divide: Niger and Netherlands

Niger Netherlands

Population (2019-mid 2019) 23.3 million 17.3 million

Projected Population (2050) 65.6 million 18.4 million
2050 Projected Population as a Multiple of 2019 2.8 1.1
Lifetime Births per Woman (2019) 7.0 1.6
Annual Births (2019) (thousands) 1,095 173
Annual Deaths (2019) (thousands) 233 155.7
% of Population Below Age 15 (2019) 50% 16%
% of Population Ages 65+ (2019) 3% 19%

% of Population Ages 65+ (projected 2050) (2016) 3% 27%

Life Expectancy at Birth (2019) 60 M; 63 F years 80 M; 83 F years
Infant Mortality Rate (per 1,000 live births) (2019) 47 3

Source: Population Reference Bureau (PRF), Oct. 2019

10
 Population Pyramids

It is also called "age-sex

pyramid", is a horizontal
bar graph that illustrates
the distribution of
different age groups
(called cohorts) in a
country in a given year,
showing the number of
males on the left and of
females on the right.
 Population Pyramids

 Types of population pyramids:

 Expansionary
 Stationary
 Contractionary

 Economic consequences for development: three cohorts:

younger than 15 years, between 15-65 years old (maintain the
others) and elderly population, older than 65 years  DEPENDENCY
https://blogaldeaglobal.com/2017/10/18/tasa-de-dependencia-demografica-por-paises-2016/

 Less Developed Countries: the first cohort concentrates 40% of

population, non productive population, they need resources for training
and education.
 Developed Countries: not that problem, ageing population problem with
increasing pressure over the Security System and the pension systems.
 Economic consequence for income distribution: migration
flows (an increasing importance phenomenon). 12
 Population Pyramids
Population Pyramid of Less Population Pyramid of
Developed Countries Developed Countries

Economic consequences:
three groups; under 15, 15-
65 (supports the other two) Developed, they do not have this
and over 65.In developing problem, but narrow base and
countries, the first 40% bulky central sections, lead to a
group, unproductive, need future of SS systems complicated
to dedicate resources to by the increase in the population
training, but these are over 65 years of
scarce. age.Consequence of income and
population distribution: migratory
movements (a phenomenon of
growing importance).

Triangular and expansive (in development), oval and

stationary, with a very wide apex due to the aging of
Source: US Census Bureau (Alonso, J.A. 2021) the population (in the most developed). 13
 Population Pyramids
Population Pyramid of Latin Population Pyramid of Sub-
America and the Caribbean Saharan Africa

Source: US Census Bureau (AlonsoJ.A., 2021) 14

LESSON 3

3.2. DEMOGRAPHIC DEVELOPMENT

STAGES. THE DEMOGRAPHIC
TRANSITION
15
 Demographic development stages

Early XXc: 2,000 millions 2020 > 7,700 millions

Implications:
• Social
• Economics
• Cultural Demographic evolution is related to
• Environmental economic development.

We will follow the Unified Theory of

Growth, which distinguishes three
phases in demographic development. 16
 Demographic development stages

 Evolution: Years 1820-2019: population grew from 1,067 to

7,691 billions. Modest change (multiplied by 7.2) in
comparison with the GDP’s increase (multiplied by 70 in the
same period).

 It seems to have a causal relation between population growth

and degree of development, but this is not so evident in all
the countries and all the times. Until recent dates there was
no a global explanation to the complex relations between
demographic dynamics and level and growth of per capita
distribution.

 In the last decades important contributions to understand the

relation between per capita income, growth of the population,
technical progress and human capital (Unified Growth
Theory). 17
 Demographic development stages
Evolution of income per capita and world population
GDP per capita (in 1990 dollars)

Population (in thousand of Mill.

Population

GDP
per
capita

Years

18
 Demographic development stages

The Unified Growth Theory has 3 stages:

 Malthusian regime: in the first stages of the development, given an
almost null technological progress, the growth of product is
compared to the one of the population. Per capita income
fluctuates at a stable level. The limited productive resources (land
and K) have diminishing returns, the population becomes their own
brake. “The Malthusian trap”.
 Post-Malthusian regime: towards 1750, in the developed world,
long-lasting positive relation between income and population by
technological advances (increasing returns). The product grows
more than population. The per capita income grows at a stable and
smooth increasing rhythm.
 Two effects: the families can have more children or invest in their
education. However, the first effect is more relevant than the second.
19
 Demographic development stages

 Modern Growth Regime: It is characteristic of the most

developed phases of the capitalist economies. Negative
relation between income and population growth. The
human capital stimulates the parents to have less children
and to invest more in each of them. More investment in
education and less children.

 Therefore, the phase in which is a country is fundamental to

explain the relation between population growth, the level of
development and the expected economic growth.
.

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 Demographic transition

 It is associated with the broad sweep of economic development

and social change. It is called the “demographic transition”.
 First in Europe and the US between the XIXth and the XXth century but in
other countries is slightly different although applicable too.

 Transition process:
 1st Stage: high birth rates and high fluctuating death rates with net
growth rates = around 1% (low or marginal)
 2nd Stage: death rates fall sharply (improvements in diets, public health
and scientific medicine), high birth rates with an explosive increase in
population
 3rd Stage: stable low death rates and birth rates fall (fertility period is
lagged) achieving similar rates to mortality.
 4th Stage: death and birth rates at a low level, with net grow rates =
around 1% (low or marginal) modern demographic model.
21
Demographic transition

Natural Growth Rate = Birth Rate - Mortality Rate

1st 2nd 3rd 4rd

22
Demographic transition

23
 Demographic transition

 Northern European countries follow better this scheme. They have

completed the demographic transition before than the Southern
countries, although these countries are speeding up their process.
 Developed countries have already completed the demographic transition
and have done so in different periods (185 years in France, 90 in Italy).
 In these countries the population is barely growing or even shrinking,
and they have an aging population.

 Many Less Developed Countries are still on an intermediate stage of

their demographic transition with decreasing mortality rate (although
still high, specially in comparison with those in Europe), very high
birth rates and therefore strong growth of the population.
 Within developing countries two groups can be distinguished: Countries
that are close to completing their transition (Latin America and part of
Asia), with declining birth rates and an aging population.
 Countries late in the transition process (sub-Saharan Africa), still with
high birth rates, high population growth and a very young population.
24
 Demographic transition

The big figures of the demographic transition, 2020

Annual Child Children
Population Natality Mortality Life expectancy
Area natural mortality per
(millions) (‰) (‰) (men/ women)
growth (%) (‰) woman

World 7,773 1.1 19 7 31 70/75

Developed
1,272 0.0 10 10 4 1.6 77/82
countries
Developing
6,501 1.4 20 7 34 2.5 69/73
countries

Less developed
1,062 2.6 33 7 49 4.1 63/67
countries

Africa 1,338 2.6 3. 4 8 49 4.4 62/65

North America 368 0.3 11 8 6 1.7 77/81

Latin America
651 1.0 16 6 14 2.0 72/79
and Caribbean

Asia (excluding
3,223 1.3 19 6 31 70/74
China)

China 1,402 0.3 10 7 9 1.5 75/79

Europe 747 -0.1 10 11 4 1.5 75/82
Oceania 43 1.0 17 7 16 77/81
25
Source: World Population Table 2020, Population Reference Bureau
 Demographic transition

CAUSES
 Decreasing mortality (combination of multiple factors): economic
development, health and hygiene system, income and standards
of living improvements (up to a certain level, then its effect is
minimal).
 Decreasing fertility rates: socio-cultural changes, incorporation of
women to labor markets.
 Developed Countries (DCs): FR very low=1.6
The fertility rate (FR) must be greater than 2.1 to guarantee the replacement,
since there are more male than females. Non a single developed country has a
FR greater than that one. Therefore, population only grows through the
migration flows. Spanish FR=1.25 (prov.) (INE 2018, published: June, 19-2019).
http://www.ine.es/dyngs/INEbase/es/operacion.htm?c=Estadistica_C&cid=1254736177003&menu=ul
tiDatos&idp=1254735573002

 Less Developed Countries (LDCs): FR still high

The demographic transition has started during the 70s although it is faster in
LATAM and ASIA, in Africa is still at the beginning. 26
World Population Data Sheet 2014, PRB

27
 Demographic transition

 Modern Microeconomic Theory or Theory

of the fecundity transition (Gary Becker).
 It clearly explains these changing patterns based on fecundity.
Parents demand children depending on their cost/benefit and not only
on their income level.
 Non-altruist Parents: children as an investment good:
 Decreasing mortality rate: parents decide how many children depending
on their survival possibility. As LE is increasing, then they have less kids.
 Rupture of the tie family-company: children do not inherit parents’ jobs,
then they do not contribute with their effort to increase the family´s income.
 Welfare State: it guarantees the sustenance of elderly.

 Altruist Parents: children as an consumption good:

 Female incorporation to labor markets increases the opportunity cost of
having children
 Increase of children costs due to necessity of investing on H (societies
pressure more because they need high qualified workers).
28
 Demographic transition

 All these factors have raised the cost and price of the children and
reduced the benefit that compensates for the positive effect that higher
income can have on fertility rate.

 DCs: Trends on mortality and fertility rate generates societies with

higher life expectancy and a great potential growth. At the same time,
these kind of societies show low fertility rates as well as low natural
population growth rates

 LDCs: have decreasing mortality rates but still high fertility ratios with
therefore high natural population growth rates.

 2020 marks a milestone in the evolution of mortality in the world.

Government action to contain the health and economic impact of the
crisis: case tracking techniques, restrictions on movement within
countries and across borders or the implementation of social distancing
measures (school closures, non-essential businesses. .). 29
 Demographic transition

Demographic Transition Data, 2019

Developed Developing Undeveloped

World
Countries Countries Countries
1850 1950 2019 1850 1950 2019 1850 1950 2019 1850 1950 2019
Population (bill. inhabitants) 1,170 2,515 7,691 832 1,266 1,683 6,355 1,027
Natural growth rate (%) 0.53 1.88 1.1 1.00 1.28 0.0 2.05 1.4 2.5
Birth rate (per thousands) 37.4 19.0 26.0 22.6 10.0 44.6 21.0 33.0
Mortality rate (per thousands) 19.7 7.0 25.0 10.1 10.0 24.3 7.0 8.0
Infant Mortality Rate (per thou.) 31.0 5.0 34.0 49.0
Fertility rate (births per woman) 5.0 2.4 5.0 2.8 1.6 6.2 2.6 4.2
Life expectancy (years): M-F 2019 46 70/75 35 66 76/82 41 69/73 63/66

Source: World Population Report 2019 & 2016, Population Reference Bureau.

30
LESSON 3

3.3. CURRENT SITUATION AND

PROSPECTS OF THE WORLD
POPULATION
31
 Current situation and prospects of the world
population

 The evolution of the world population during the last two

centuries has split up the world into two blocs with
different characteristics and demographic patterns. As the
economic development has also been different, the
migration flows have achieved a level without precedents.

 Some current patterns:

 Inequality in the geographical distribution of the population. China
and India, 36% of the population, + Pakistan, Brazil, Indonesia and
the USA, 50%.
 Asymmetry with income distribution: North America, Europe, Japan
and Oceania 17% of the population and 45% of income. The
remaining 83% of the population share 55% of the income.
 The distribution by sex and age also presents a very different
profile in the developed world and the developing world, as
reflected in the Population Pyramids 32
 Current situation and prospects of the world
population
Structural features of the world population in 2020

Latin
North America
World Africa Asia Europe Oceania
America and
Caribbean

Population (millions) 7,773 1.,338 368 651 4,626 747 43

Percentage of population 100 17.2 4.7 8.4 59.5 9.6 0.6

Pop . < 15 years (%) 26 41 18 24 24 16 23

Pop . > 65 years (%) 9 3 17 9 9 19 12

urban percentage 56 43 82 79 51 75 68

Per capita income in PPP ($

16,885 4,820 62,327 15,944 12,810 38,709 36,264
2018)

Percentage of total world

100 5 18 8 46 22 1
income

Source: World Population 2020, Population Reference Bureau. 33

http://www.worldpopdata.org/ ; http://www.worldpopdata.org/index.php/chart
 Current situation and prospects of the world
population

Cases and deaths from COVID-19 after one year

WHO Regions Accumulated cases Accumulated deaths Country Accumulated cases Accumulated
(millions and %) (thousands and %) (millions) deaths
(Thousands)
America 52, 7(44%) 1.268 (48%) Estados 29.8 542
Unidos
Europe 41, 0 (34%) 906(34%) India 11.2 158
South East Asia 13,8 (12%) 212(8%) Brasil 11.2 270
Eastern 6,8 (6%) 150(6%) Reino 4.3 124
Mediterranean Unido
Africa 2,9 (2%) 74(3%) Rusia 4.2 90
Western Pacific 1,7 (1%) 30(1%) Francia 3.9 89
TOTAL WORLD 119 (100%) 2.582(100%) España 3.1 71

Fuentes: World Health Organization, Weekly epidemiological update - 16 March 2021 y https://www.worldometers.info/coronavirus/
 World Population Forecast

By 2050 the UN forecasts main trends:

 More population: the population to reach 9.6 billions and still

be rising.
 Much older: around 20% of the world (almost 2 billion people)
will be over 65 years.
 Much people living in cities: 5,5 billions
 Life expectancy (78 years); Fertility rate (LDCs: 2.16, DCs:
1.86); Growth rate (LDCs: 0.58%, DCs: -0.27%)

35
 CURRENT SITUATION AND PROSPECTS OF THE
WORLD POPULATION

Source: The Economist (July 18, 2014) http://www.economist.com/blogs/graphicdetail/2013/06/daily-chart-10 36

37
LECCIÓN 3

3.4. MIGRATIONS

38
 International demographic patterns and trends
MIGRATIONS

 Definition: permanence of the phenomenon of the

emigration.
 Consequences economic, social, cultural, and
demographics.

 Origins: demographic lightening on the labor market,

inflows of currency reserves, human capital with the
return (but also brain drain), future possibilities of
growth.

 Recipients: population growth, increase of the natality

(births), increase of the demand of social services.
39
 International demographic patterns and trends
MIGRATIONS

 International migrations are as old as men.

 Increasing flows in the last decades of the XXth century:
1965: 76 millions
2015: 244 millions (3.3% of world population).
Average growth rate 2.4%.
 More people and more countries are engaged:
 Migration flows data (2015):
 37% is moving among LDCs.
 36% is moving from LDCs to DCs.
 21% from among DCs.
 6% from DCs to LDCs.
 In the last decades, DCs have concentrated the majority of
migrants: nowadays 56% of total migrants are in those countries.
 USA, is the most important destination (in absolute terms): 47
millions (1/5 of the world). India is the main origin: 16 mil.
40
 International demographic patterns and trends
MIGRATIONS
International immigration by region, 2020
Number of immigrants
Percentage of total Percentage of the
(millions)
Areas international population of the host
1990 2000 2020 immigrants, 2020 region 2020

Africa 15.7 14.8 25.3 9 1.9

Asia 48.1 49.2 85.6 31 1.8

Europe 49.2 56.3 86.7 31 11.6

Latin America 7.2 6.6 14.7 5

North America 27.6 40.4 58.7 20 15.9

Oceania 4.7 5.4 9.3 3 22

World 152.5 172.6 280.5 100 3.5

By income level
Developed countries 82.3 103.3 157 56 12.4

Developing countries 71.8 71.1 123.3 44 1.9

less developed
10.9 10.2 16.2 6 1.5
countries 41
Source: United Nations. Trends in International Migrant Stock. The 2020 Review.
 International demographic patterns and trends
MIGRATIONS AND THE LABOR MARKET

Emigration rates to the OECD by region of origin

Área Total Population Female Population

Emigration high Emigration high
Emigration rate Emigration rate
quailified rate quailified rate
Africa 2.4 10.8 1.8 8.8
Asia 0.9 3.3 0.9 3.7
Europe 5.0 5.3 4.9 5.0
North America 0.9 0.8 0.9 0.8
Oceania 4.4 4.8 4.1 5.2
LatinAmerica and
5.7 7.4 5.4 7.4
Caribean
Source: World Migration in Figures, 2013, UN-DESA y OECD, Sara Barcenilla (2019), en Alonso, J.A.

42
International demographic patterns and trends
MIGRATIONS
Evolution of remittances and international aid received by
developing countries (1990-2017), in millions of current dollars

Source: The World Bank and ODCE, Sara Barcenillas, en Alonso, J.A. (2019) 43
 International demographic patterns and trends
MIGRATIONS
Main Receiving Countries
of Immigrants, 2017, thousands
60000
50000
40000
30000
Main Issuing Countries
20000
of immigrants, 2017, thousands
10000
0
20000
18000
16000
14000
12000
10000
8000
6000
4000
2000
0

44
MIGRATIONS

Net migration rates for 2016: positive (blue), negative (orange),

stable (green), and no data (grey) 45
 International demographic patterns and trends
MIGRATIONS AND THE LABOR MARKET

 Jointly to the international migration, it has to be

mentioned also the internal migration.

 In Europe and the US, people moved from rural to

urban areas looking for better life conditions.
Development of the industry and services.

 In LDCs, there has been also this kind of migration

although the urban unemployment rate is still
relative high. Deplorable life conditions.

46
 International demographic patterns and trends
MIGRATIONS AND THE LABOR MARKET

 The economic theory explains the migration flows as the

outcome of many interconnected causes:

 Push Factors: international inequality, inequality within the

country, economic and social problems, inadequate
functioning of the financial and insurance market,
economic unstructuring and slack of expectations for
progress…

 Pull Factors: labor opportunities, increasing homogeneous

tastes and global values, social networks, relatives links
(culture…) in the destination country, reduction of
transport costs...
47
LESSON 3

ANNEX HUMAN CAPITAL

48
 Human Capital

 Human Capital (H): it is the addition of all inner individual

capacities as well as all the skills acquired during his/her
life (inter-generational transmissions, personal contacts,
labor experience and formal education/training).

 It is a key factor in explaining the economic development of

countries: the current, the past and the future trends (higher
productivity in ageing societies).

 It generates positive externalities (it makes other production

factors more productive), and it is also indispensable for the
technological progress (public good, role of governments).

49
 Human Capital

 In LDCs (developing countries), it is even more important than

in DCs since H is a key driver for the demographic and
economic transition. It is necessary to achieve a certain level of
H in order to boost local technology and to incorporate foreign
technologies. Therefore LDCs would approach their growth rate
to the one in developed countries.

 In general, this factor is measured through the alphabetization

rate (literacy rate). This rate has improved a lot during the last
decade (from 76 to 85%) as well as the scholarship rate
(primary, secondary, and tertiary). It is also important to
estimate the quality of H (PISA).

50
 Human Capital
Indicators of education in the world

51
Source: Alonso, J. A. Information from the Online Data Center of the Institute of Education Statistics, UNESCO, 2017. Most recent data for each country 2016.
Human capital

52
Relationship between the level of income per capita and average years of
schooling

average years of schooling

Source: Compiled using data from Barro and Lee (2010) and Penn World Tables
1.Positive exponential relationship between the two variables. The presence of a threshold is also noted
from which the effect of an additional year of education on the level of economic development (or vice
versa) is greater.

2. Economic theory shows that education can generate a profit greater than the sum of the benefits
(higher income) earned by individuals investing in its company, due to the favorable environment for
innovation and thus economic growth.

3. Some estimates indicate that for every additional year of schooling may rise half the growth rate of 53
per capita income in the long term by 0.58 percent.