12 Main Consequences of

Population Growth
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This article throws light upon the twelve main consequences of

population growth. The consequences are: 1. Investment 2.
Overuse of Resources 3. Urbanisation 4. Per Capita Income 5.
Standard of Living 6. Agricultural Development 7. Employment 8.
Social Infrastructure 9. Labour Force 10. Capital Formation 11.
Environment Rapid Population Growth Leads to Environmental
Damage 12. World Economy.
Consequence # 1. Investment:
Faster population growth makes the choice more scarce between
higher consumption now and the investment needed to bring higher
consumption in the future. Economic development depends upon
investment. In UDCs the resources available for investment are
limited. Therefore, rapid population growth retards investment needed
for higher future consumption.

Consequence # 2. Overuse of Resources:

Rapid population growth tends to overuse the country’s natural
resources. This is particularly the case where the majority of people
are dependent on agriculture for their livelihood. With rapidly rising
population, agricultural holdings become smaller and unremunerative
to cultivate. There is no possibility of increasing farm production
through the use of new land (extensive cultivation).

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Consequently, many households continue to live in poverty. In fact,

rapid population growth leads to the overuse of land, thereby
endangering the welfare of future generations. Even in countries
where natural resources are untapped such as Brazil and other Latin
American countries, rapidly increasing population makes it difficult to
invest in roads, public services, drainage and other agricultural
infrastructure needed to tap such resources.

Consequence # 3. Urbanisation:

With rapidly growing population, it becomes difficult to manage the
adjustments that accompany economic and social change.
Urbanisation in UDCs creates such problems as housing, power,
water, transport, etc. Besides, growing population threatens
permanent environmental damage through urbanisation in some rural
areas.

Consequence # 4. Per Capita Income:

The effect of population growth on per capita income is unfavourable.

The growth of population tends to retard the per capita income in

three ways:
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(i) It increases the pressure of population on land;

(ii) it leads to rise in costs of consumption goods because of the

scarcity of the cooperant factors to increase their supplies; and

(iii) it leads to a decline in the accumulation of capital because with

increase in family members, expenses increase.

These adverse effects of population growth on per capita income

operate more severely if the percentage of children in the total
population is high, as is actually the case in all UDCs. Children involve
economic costs in the form of time and money spent in bringing them
up.

But they are also a form of investment if they work during childhood
as is the case with the majority of families, and if they support parents
in old age which is rare in the case of majority of children.
As these economic gains from having many children are uncertain,
therefore a large number of children in the population entails a heavy
burden on the economy, because these children simply consume and
do not add to the national product. Another factor is the low
expectancy of life in underdeveloped countries.

It means that there are more children to support and few adults to
earn thereby bringing down the per capita income. Whatever increase
in national income takes place that is nullified by the increase in
population. Thus the effect of population growth is to lower the per
capita income.

Consequence # 5. Standard of Living:

Since one of the important determinants of the standard of living is the
per capita income, the factors affecting per capita income in relation to
population growth equally apply to the standard of living. A rapidly
increasing population leads to an increased demand for food
products, clothes, houses, etc. But their supplies cannot be increased
in the short run due to the lack of cooperant factors like raw materials,
skilled labour, capital, etc.

Consequently, their costs and prices rise which raise the cost of living
of the masses. This brings down further the already low standard of
living. Poverty breeds large number of children which increases
poverty further, and the vicious circle of poverty, more children and
low standard of living continues.

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But Hirschman and Colin Clark opine that population pressures

leading to lowering of standards will encourage the people of UDCs to
work hard in order to improve their standard of living.

Consequence # 6. Agricultural Development:

In UDCs, people mostly live in rural areas. Agriculture is their main
occupation. So with population growth the land-man ratio is disturbed.
Pressure of population on land increases because the supply of land
is inelastic. It adds to disguised unemployment and reduces per capita
productivity further. As the number of landless workers increases,
their wages fall. Thus low per capita productivity reduces the
propensity to save and invest.

As a result, the use of improved techniques and other improvements

on land are not possible. Capital formation in agriculture suffers and
the economy is bogged down to the subsistence level. The problem of
feeding the additional population becomes serious due to acute
shortage of food products.

These have to be imported which increases the balance of payments

difficulties. Thus, the growth of population retards agricultural
development and creates a number of other problems discussed
above.

Consequence # 7. Employment:

A rapidly increasing population plunges the economy into mass
unemployment and under-employment. As population increases, the
proportion of workers to total population rises. But in the absence of
complementary resources, it is not possible to expand jobs. The result
is that with the increase in labour force, unemployment and under-
employment increases. A rapidly increasing population reduces
incomes, savings and investment.

Thus capital formation is retarded and job opportunities are reduced,

thereby increasing unemployment. Moreover, as the labour force
increases in relation to land, capital and other resources,
complementary factors available per worker decline.

As a result, unemployment and under-employment increase. UDCs

have a backlog of unemployment which keeps on growing with a
rapidly increasing population. This tends to raise the level of
unemployment manifold as compared with the actual increase in
labour force.

Consequence # 8. Social Infrastructure:

Rapidly growing population necessitates large investments in social
infrastructure and diverts resources from directly productive assets.
Due to the scarcity of resources, it is not possible to provide
educational, health, medical, transport and housing facilities to the
entire population.

There is over-crowding everywhere. As a result, the quality of these

services goes down. To provide these social infrastructure requires
huge investments.

Consequence # 9. Labour Force:

The labour force in an economy is the ratio of working population to
total population. Assuming 50 years as the average life-expectancy in
an under-developed country, the labour force is in effect the number
of people in the age-group of 15-50 years. During the demographic
transitional phase, the birth rate is high and the death rate is on the
decline. The result is that a larger percentage of the total population is
in the lower age-group of 1-15 years.

It means that the addition to the lower age-group is larger than in the
working age-group. A large percentage of children in the labour force
is a heavy burden on the economy. It also implies that the labour force
tends to increase with the increase in population.

It will grow even faster, if more women seek paid employment. Since it
is not possible to increase capital per worker (i.e., capital deepening)
with growing labour force, each worker will produce less than before.

This will reduce productivity and incomes. Wages will fall in relation to
profits and rents, thereby increasing income inequalities. Besides,
rapid growth in the labour force increases both open unemployment
and under-employment in urban and rural areas.

Consequence # 10. Capital Formation:

Population growth retards capital formation. As population increases,
per capita available income declines. People are required to feed
more children with the same income. It means more expenditure on
consumption and a further fall in the already low savings and
consequently in the level of investment.

Further, a rapidly growing population by lowering incomes, savings

and investment compels the people to use a low level technology
which further retards capital formation.
Consequence # 11. Environment Rapid Population Growth
Leads to Environmental Damage:
Scarcity of land due to rapidly increasing population pushes large
number of people to ecologically sensitive areas such as hillsides and
tropical forests. It leads to overgrazing and cutting of forests for
cultivation leading to severe environmental damage.

Moreover, the pressure of rapid growth of population forces people to

obtain more food for themselves and their livestock. As a result, they
over-cultivate the semi-arid areas. This leads to desertification over
the long run when land stops yielding anything.

Besides, rapid population growth leads to the migration of large

numbers to urban areas with industrialization. This results in severe
air, water and noise pollution in cities and towns.

Consequence # 12. World Economy:

Rapid population growth also affects UDCs in relation to the world
economy in a number of ways. First, rapid population growth tends to
increase income disparities between UDCs and developed countries
because the per capita incomes decline with growth in numbers in the
former.

Second, rapid population growth encourages international migration.

But these are limited only to the Middle East countries where there is
a dearth of skilled and unskilled labour. But the developed countries
place restrictions on immigration because labour from poor countries
adversely affects the wages of native workers and also creates social
and political tensions.

Third, emigration tends to increase wages of workers substantially at

home. Fourth, another beneficial effect of this is that emigrants remit
large sums of money back home. This increases family incomes and
their living standards at home. Such families spend more on food,
clothing and on modern household gadgets. Thus they lead more
comfortable lives. Some repay family debts, while others invest in
agricultural land and urban real estate.
On their return, some enterprising persons start new ventures and
others expand family-owned commercial and manufacturing
businesses. Further, remittances by emigrants help finance the
countries balance of payments deficit. But UDCs are great losers
because of the ‘brain drain’ when professional and technical workers
emigrate to other countries.

They subsidise the educational costs of such personnel but are

unable to tax their incomes. The money they remit is insignificant as
compared with the above two types of losses. Often the best of the
brains are allowed to settle permanently in the employing country
which is a permanent loss to the home country.

Lastly, with rapid population growth the domestic consumption of even

exportable goods increases. Consequently, there is a decline in the
exportable surplus. On the other hand, to meet the demand of rapidly
increasing population, more food and other consumer goods are
required.

It leads to an increase in imports of such goods alongwith those of

capital goods needed for the development. Reduction in exports and
increase in imports lead to deterioration in the balance of payments
position of the country. This may force the state to curtail the
importation of capital goods which will adversely affect economic
development of the country