THE IMPACT OF POPULATION GROWTH ON SOCIO-ECONOMIC

DEVELOPMENT IN EGYPT

Shaimaa Sabry

Sarah adel

Mohamed shawky

Department Of Economics, Faculty of Economics and Political Science, Cairo

University

Dr. Heba Youssef

10 Feb, 2022
1-INTRODUCTION

1.1Background of the study:

▪︎The concept of "Development" is strongly related to economic activities; in order to achieve the
economic growth, as well as achieving healthy and socially inclusive societies , as the economic
development implies changes in the income, Savings and Investment along with progressive changes
in social economic structure of the country's social, institutional, and technological changes, as the
main scope of economic development is more relevant to measure economic growth, as well as
measuring progress in quality of life in the countries; as it brings qualitative and quantitative changes
in the economy.

▪︎During the last quarter in the 20th century, the concept of development became more concerned with
humanity and sustainability, humanity through involving it many areas such as development of human
capital, critical infrastructure, social inclusion, health, safety, literacy and other initiatives, and
concerned with sustainability which means meeting the needs of the present without compromising
future needs "sustainable development".

▪︎ as the economic development is highly concerned with people lives, so the relationship between the
population growth rates and the economic development is an important and controversial research
area.

▪︎ in a world with 7 billion people, and a high population growth rates specifically in the less developed
countries, and the emerging of many problems related to the shortage of the resources, and
accumulation of capital reflects the need for economic development, and its sustainable principles to
avoid pressure on the resources.

▪︎ Egypt is a developing country with a population of 102 million in July 2021, with annual population
growth rate 1.88% ( capmas, 2021), Egypt is ranked as number 14 in the world's most populated
countries list. Egypt has a fertility rate (total births per woman) of 3.28 (World Bank, 2019) and that
high population growth rate and high fertility rate are caused by many social and cultural aspects.

▪︎ So the high population growth rate and high fertility rate are forming hard challenge for the
government; as this may hinder achieving many economic and social goals related to the economic
development, so the government should work on two parallel lines to work on the decreasing the
population growth rates, and in the same time work on achieving The development goals as stated in
the country's development plans.

1.2 Statement of the problem:

Egypt has a rapid population growth rates; due to high fertility rates, as well as many other social and
cultural reasons, also Egypt has a relatively low GDP growth rates as well as low GDP per capita rates,
so under the given economic conditions in Egypt serious efforts and policies are needed to take off
and achieve sustained economic development, by accelerating all the economic development
indicators and to reach the needed economic well-being.

1.3Main question:

What is the impact of population growth on the social economic development in Egypt?

1.4Sub questions:

1) how the concept of economic development has evolved with overtime?

2) what is the demographic patterns and fertility trends Egypt?

3) what is the relationship between the high population growth rate and economic development in
Egypt?

1.5 Objectives:

1) Analysing the concept of economic development and it's evolution or a time as well as analysing
Egypt's economic development path.

2) Describing demographic patterns and fertility trends Egypt.

3) Testing ship between the population growth rate in the economic development in Egypt.

4) Extracting the benefits from success stories to get some recommended policies to enhance achieving
economic development goals in Egypt.

1.6Paper Significance
According to experts, Egypt’s population growth has become a national security
concern the increase in population has massive harmful role in a crisis structure that is destructive to the
economy and its development
This paper significance aims to intensify the dilemma of over population and its size growth and it's affect
on Egypt's economic development state
to show way of dealing with such problem by altering country's fertility
and how the result would be reflected on the development scale.
Lower fertility can also help to enhance socioeconomic development by lowering the number of children
who are dependent. Children under the age of 15 now account for 24% of Egypt's overall population. If
fertility is reduced to replacement level by 2016, this proportion will drop to 21%. Continuing at the
current fertility rate, on the other hand, will bring the proportion of children to 30% of the overall
population in 2016. The present dependence ratio (that is, the proportion of children under 15 and older
individuals over 60 relative to the number of people in the age range 15–60) will be reduced from 0.71 to
0.40 with a lower child-to-adult ratio.
Families will have more disposable cash to save or invest if they have fewer children. This is known as a
"demographic bonus," because it has the potential to boost economic development, generate jobs, and
lower unemployment. In 1995, unemployment rates for secondary school and university graduates were
31.5 and 11.8 percent, respectively. When making links between decreased fertility and socioeconomic
progress, however, some care is advised. The "demographic benefit" is not automatic; it is contingent on
sound policy in other areas. Savings must be put to good use.
The findings of this study provide some insight on new directions and sectors of action in relation to
countries' new population policies to

Adapt following the International Conference on Population and Development (ICPD) in 1994. Family
planning programmes are being phased out, and targets are being set.

The end of difficult work in the field of population policy does not equal the end of contentious work in the
field of population; new problems lie ahead. Demographers should refocus their research on new trends
and difficulties brought on by population stagnation and the implication of population growth.

Issues relating to age structure as a result of declining fertility, ageing, and demographic changes should be
addressed and investigated. Demographers should focus on themes such as population and demographic-
related disciplines of study such as education and labor force.

2The Impact of population growth on economic development in Egypt

Literature Review:
This paper's literature review aims to clarify the impact of population growth on economic development in
Egypt throughout the period 2000-2021 and the implications around this topic through different economic
measurements and indices under the vision of earlier academic studies over many different regions and on
Egypt specifically in the light of economic development and population size.
According "An Essay on the Principle of Population" the link between population growth and economic
progress has been a recurring issue in economic research. Since at least 1798, when Thomas Malthus
famously asserted that population expansion would reduce living standards in the long term, The theory
was straightforward: given a fixed amount of land, population increase will eventually restrict the amount
of resources that each individual can use, leading to disease, hunger, and conflict. Moral restraint was the
key to avoiding such negative result (i.e. refraining from having too many children).
Economists at the time believed that high birth rates and rapid population expansion in underdeveloped
nations would shift scarce resources away from savings and investment, putting a halt to economic
development. They reasoned that bigger families have less resources in aggregate and fewer resources per
kid. As a result, larger families must spread their resources more thinly in order to sustain more children.
This reduces the amount of money available for saving and investing in growth-enhancing activities. It also
cuts funding on boosting each child's economic potential.
2.1Theoretical Review
Majority of Economists studies stated two theories on the effect's nature of overpopulation on the economy
as whole and One economy's development.
The Studies shows that it may have either the positive effect or the negative effect depending on the
economic conditions of the developing or developed economies.
Depending on the conditions, population expansion can have a beneficial or bad impact.
Others point to beneficial benefits such as economies of scale and specialization, the probable boost to
favorable motivation produced by increasing reliance, and younger people' more favorable views, skills,
and motivations when compared to older populations.

High population growth, according to certain theoretical studies, puts a strain on finite natural resources,
lowers private and public capital development, and diverts capital resources to maintaining rather than
expanding the stock of capital per worker. Because a larger population places a greater strain on the
government to support them, provide education, healthcare, and other services, and because a large
population may cause deterioration of the country's facilities, institutions, and infrastructure. There is also a
growing argument that has gotten a lot of attention recently that Egypt has a constant amount of natural
resources while the population grows, which means that we will run out of them sooner or later.
The paper mainly concerned with the developing country " Egypt", Providing more evidences and data
regarding this impact on many other developing countries such as " Pakistan and India"
Attaching the General theories stated before around the relation between the two factors in the Empirical
review
2.3Empirical Review
- Concluded by Ahmad, Afzaal 2011
"THE IMPACT OF POPULATION GROWTH ON SOCIO-ECONOMIC DEVELOPMENT:
PAKISTANI EXPERIENCE"
" Explosion of population growth has negatively affected development process and sustainability of
growth rate in the developing country Pakistan."
The variable is also very important for population growth, as lower inflation leads to higher GDP, as
evidenced by the literature in studies such as Barro's (1996). In other words, it also indicates that, as
indicated in this study, a drop in population may result in a fall in inflation rate, which symbolizes the
country's economic progress and vice versa as the high rates of population increase in Pakistan have been
proven to have a major negative impact on economic development, which is thought to have occurred
because resources were diverted to the growing population rather than capital accumulation..
-According to World Population Review
Egypt's population is estimated to be over 102 million people. Egypt's population is predicted to quadruple
by 2078, according to current forecasts. The population is now rising at a pace of 1.94 percent, which
means that every year roughly 2 million individuals are added to the population.
Egypt's population is growing at an alarming rate, prompting the government to increase spending on
family planning initiatives. Scholars, on the other hand, are criticizing the government's decision, believing
that the high fertility rate and population increase are no longer significant problems. This is true to the
degree that, despite its high level, the fertility rate has decreased in recent years. Statistics reveal that the
number of children per woman has declined from 7.2 in the early 1960s to 3.4 in 1998. Even twenty years
later, this rate has remained consistent, with 3.47 children per woman in 2018.
There is no question that Egypt's population has grown and will continue to grow as the country stabilizes,
with predictions estimating a total population of 123.5 million by 2050.
The rapidly increasing population poses a threat to the Egyptian economy, where one-third of people live
below the poverty line and the unemployment rate is around 10%.
- Tung Sl An econometric analysis of the effects of population change on economic growth: a study of
Taiwan
The impacts of demographic characteristics on the Taiwanese economy were evaluated using an
econometric model generated from time series data in this study. The simulation findings show that a
stagnant population provides much higher income per capita in the short run than rapid population
increase; yet, rapid population expansion produces somewhat higher income per capita in the long run. The
population size, comparable adult consumers, and labor force can be projected to rise by no more than 50%
in a century if extremely low fertility trends are assumed, but they would more than double if very high
fertility trends are assumed.
- UNESCO. Regional Office for Education in Asia and the Pacific. Population change and some
aspects of socio-economic development.
Poverty is a reality in many of the region's countries. According to the World Bank, half of the world's
poorest population live in South Asia, mostly India and Bangladesh. Unfortunately, poverty is
typically considered as the cause rather than the outcome of high fertility among the very poor.
Mortality, particularly newborn mortality, is disproportionately high among the impoverished. China
is one of the countries that has realized that high population increase is incompatible with rapid wealth
accumulation. It has been found that when GNP per capita rises, the birthrate falls in most nations.
This is true in the region's developed countries, such as Australia, Japan, New Zealand, and Singapor

3-Methodology:

3.1Methods:

The study is an attempt to analyze the impact of increasing population which lowers the development
process. Twenty-one (21) year’s time series data has been collected from the year 2000 to 2021by the
Economic data, Government of egypt, Finance Division. to analyze the negative relationship between
population growth and the factors involved in development process of the economy.

A qualitative approach will be used through data about the gdp per capita growth and the population
growth rate for egypt. Qualitative approach is systematic and rigorous. It seeks to reduce bias and
error and provide evidence and illuminating the experience and interpretation of events and it also test
hypotheses also moves towards explanting phenomena to develop theories.

from World Bank database (world development indicators) will be used Also the paper will show the
relationship between the labor productivity and the over population and unemployment rate and
economic development. The time frame will be from 2000-2021 due to data availability of the main
variables. the data will be collected from world bank , capmas, centeral bank of Egypt ,OECD After
collecting data about the previously mentioned measures about Egypt will be conducted and that will
be clearly shown through some charts and tables by using Excel as statistical tool. In this paper the
impact of the population growth on the economic development will be shown

this paper follow trends and percentage as an analytical tool by analyze the economic development
indicators such as health expenditure, education expenditure, GDP growth,population growth inflation
rate, unemployment rate ,imports, exports, development expenditure , Labor Force Participation Rate.
By using excel as statistical tool

3.2Table 8.1 List of Variables and their Description

Variables Description

PP Population Growth
Rate (X)

GDP Gross Domestic

Product (Y1)

π Inflation Rate (Y2)

µ Unemployment Rate
(Y3)
 M Import (Y4)

X Export (Y5)

DE Development
Expenditure (Y6)

LFP LaborForce
Participation Rate
(Y7)

EH Expenditure on Health
(Y8)

EDU Expenditure on
Education (Y9)

3.3-Definitions and sources:

pp-population growth rate:

The annual average rate of change of population size, for a given country, territory, or geographic
area, during a specified period. It expresses the ratio between the annual increase in the population
size and the total population for that year, usually multiplied by 100. The annual increase in the
population size is defined as a sum of differences: the difference between births less deaths and the
difference between immigrants less emigrants, in a given country, territory or geographic area at a
given year

Formula for Population Change

 The standard formula for calculating growth rate is:

Gr= N / t

Source : the world bank

GDP-gross domestic product. Gross domestic product (GDP) is the standard measure of the value
added created through the production of goods and services in a country during a certain period. As such,
it also measures the income earned from that production, or the total amount spent on final goods and
services (less imports).

GDP (as per expenditure method) = C + I + G + (X-IM)

Source:OECD

Π- Inflation Rate: is the percentage change in the price index for a given period compared to that
recorded in a previous period. It is usually calculated on a year-on-year or annual basis.

Inflation Rate = ((B – A) / A) x 100

Source:centeral bank of Egypt

µ- Unemployment Rate

measures the share of workers in the labor force who do not currently have a job but are actively looking
for work. People who have not looked for work in the past four weeks are not included in this measure

Unemployment rate=Unemployed people / Total labor force×100

Source: capmas

M-imports: An import is a good or service bought in one country that was produced in another.

X-exports: Exports are goods and services that are produced in one country and purchased by the
residents of another country.

Source :world bank

DE- Development Expenditure: Developmental expenditure refers to the expenditure of the

government which helps in economic development by increasing production and real income of the
country.-Source:OECD
LFP- Labor Force Participation Rate:

The labor force participation rates is calculated as the labor force divided by the total working-age
population. The working age population refers to people aged 15 to 64

The labor force participation rate is calculated as: (Labor Force ÷ Civilian Non institutional Population)
x 100

Source: OECD

EH- Expenditure on Health: Health expenditure includes all expenditures for the provision of health
services, family planning activities, nutrition activities and emergency aid designated for health, but it
excludes the provision of drinking water and sanitation.

Source: world bank

EDU- Expenditure on Education

Total general (local, regional and central) government expenditure on education (current, capital, and
transfers), expressed as a percentage of GDP. It includes expenditure funded by transfers from
international sources to government.

Source:world bank

3.4Graphical representation:

Source:world bank
 World development indicators in Egypt:

Chart Title

Time required to start a business (days)

Statistical Capacity Score (Overall Average) (scale 0 -…
Revenue, excluding grants (% of GDP)
Poverty headcount ratio at national poverty lines (%…
Population density (people per sq. km of land area)
Net barter terms of trade index (2000 = 100)
Merchandise trade (% of GDP)
Income share held by lowest 20%
Gross capital formation (% of GDP)
GNI per capita, Atlas method (current US$)
Foreign direct investment, net inflows (BoP, current…
Energy use (kg of oil equivalent per capita)
CO2 emissions (metric tons per capita)
Adolescent fertility rate (births per 1,000 women ages…
-5E+12 0 5E+12 1E+13 1.5E+13
2011 [YR2011] 2012 [YR2012] 2013 [YR2013] 2014 [YR2014] 2015 [YR2015]
2016 [YR2016] 2017 [YR2017] 2018 [YR2018] 2019 [YR2019] 2020 [YR2020]

Source: world bank

4Suggested outline for the final paper

I INTRODUCTION

1.1 Background of the Study

1.2 Statement of the Problem
1.3 Objectives

II ECONOMIC DEVELOPMENT: APPROACHES AND VIEWS

2.1 Traditional View
2.2 New Economic View of Economic Development
2.3 Care Values Approach
2.3.1 Sustenance; the Ability to meet Basic Needs
2.3.2 Self-Esteem 7 2.3.3 Freedom from Servitude
2.4 Sustainable Development
2.5 Economic Growth Vs Economic Development
III MEASUREMENT OF ECONOMIC DEVELOPMENT

3.1 Methods for the Measurement of Economic Development

3.1.1 Social Indicators

IV POPULATION GROWTH AND ECONOMIC GROWTH (DEVELOPMENT)

4.1 Malthusian Theory

4.2 Theory of Demographic Transition

4.3 The Classical Theory

4.4 Neo Malthusian Theory

V FERTILITY TREND IN PAKISTAN

5.1 Overview of the Economy

5.2 Fertility

5.3 Current Fertility

5.4 Fertility Trends

5.5 The Role of Public Policy and Determinants in Egypt

VI DEMOGRAPHIC PROFILE AND DETERMINANTS IN Egypt

6.1 Population and Gender

6.2 Population and Poverty

6.2.1 Implication of Poverty

6.3 Public-Private Partnership in Population Welfare

6.4 Population and Environment

6.5 Population and Education

6.6 Adolescent and Youth in Egypt

6.7 Mother and Child Health in Egypt

VII LITERATURE REVIEW

VII METHODOLOGY

7.1 Data and Methodology

IX CONCLUSIONS AND RECOMMENDATIONS

9.1 Conclusions

9.2 Recommendations 63 REFERENCES

References:

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on link: www.afdb.org

Egypt Economic Outlook, African Development Bank, 2016, viewed in: 6/2/2022, available on link:
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What is gross domestic product? definition of gross domestic product, Gross Domestic Product
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Amadeo, K. (2021, October 25). What are exports? The Balance. Retrieved February 10, 2022, from
https://www.thebalance.com/exports-definition-examples-effect-on-economy-3305838

Employment - labour force participation rate - OECD data. theOECD. (n.d.). Retrieved February 10,
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Kuznet, S. 1974. Fertility Differentials between Less Developed and Developed Regions:Components
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Center, Yale University, 87-88.

Ibrahim Kodair Osheiba, "Fertility in Egypt: An Analysis of Proximate Determinants and Socio
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Shaimaa sabry Methodology-suggested outline of the paper -
cover
Sarah adel Background-statement of problem-main
question-sub questions-objectives- suggested
outline of the paper
Mohamed Literature review – significance of the study
shawky