Effects of Changing Population Sizes (Cambridge (CIE) IGCSE Economics): Revision Note

The optimum population

• Overpopulation occurs when there are more people in a country/region than can be supported by its resources and technology and leads to

  • Higher levels of pollution

  • Higher crime rates

  • Higher unemployment or underemployment

  • Higher levels of food and water shortages 

  • Higher pressure on services such as hospitals and schools 

• Underpopulation occurs when there are more resources available than the population can use effectively and may lead to

  • Fewer people paying tax which can lead to higher taxes

  • Underused resources, which can lead to wastage

  • A shortage of workers

  • Lower levels of exports and production, which affects the wealth of an area

  • Fewer customers for goods and services

• Optimum population occurs when there is a balance between the number of people and available resources/technology
   

• The optimum population results in the highest standard of living

  • There are not so many people or so few resources that the standard of living falls

  • There are enough people to develop the resources of the country

Population distribution

• The characteristics of a population (the distribution of age, sex, ethnicity, religion etc), is known as the population structure 

• The population structure is the result of changes in:

  • the birth rate

  • the death rate

  • net migration

• The two main characteristics of age and sex can be shown on a population pyramid

Population pyramids

• Population pyramids are used to display the gender and age structure of a given population

  • They illustrate the distribution of population across age groups and between male/female 

• Population pyramids can be used to identify the following groups:

  • Young dependents 

  • Old dependants, e.g. number of retired people

  • Economically active (working population or labour force)

  • Dependency ratio 

Example 1: Niger as a less economically developed country (LEDC)

• LEDCs like Niger have a concave pyramid shape which indicates

  • High birth rate

  • Low life expectancy

  • High death rate but starting to decrease (people dying through every age group)

  • High infant mortality rate (significant decrease between 0-5)

  • Young dependent population dominates the distribution 

Example 2: USA as a more economically developed country (MEDC) 

• This population pyramid indicates:

  • Decreasing birth rate  - there is a smaller population reading down from age 29

  • Increasing life expectancy – indicated by the relatively straight sides reaching the age of 70, followed by a good proportion of people living much longer

  • Decreasing death rate – indicated by the relatively straight sides reaching the age of 70

  • Low infant mortality - hardly any change between 0-9 years

  • Larger working age population - 15 to 69 represents a large proportion of the population 

Effects of population changes

• Population changes can have major impacts within the economy, resulting in changes to consumption, production, lifestyle, standards of living and government policies (fiscal, monetary and supply-side) 

• Typical changes that occur are

  • Progressively ageing populations as economies develop

  • Falling birth rates as economies develop

  • Swings in net migration as influenced by war, famine, natural disasters and government policy 

Ageing populations

• Many developed economies are experiencing ageing populations and an increase in the older dependent population

• The implications of this include

  • Increased pension payments by governments

  • Increased need for care homes (public and private)

  • Increased pressure on the healthcare service and social care results in higher government spending

  • It also results in a smaller labour force and often Governments collect less tax

  • Firms suffer worker shortages

  • Labour shortages result in increased wage costs for firms  

Falling birth rates

• Falling birth rates have the following impact on an economy

  • School closures due to fewer children

  • Future labour shortages 

  • Governments typically put in place incentives that encourage families to have more children

  • Governments may change the migration laws to encourage immigration so that labour shortages are prevented

    • Excessive immigration can change the nature and culture of different regions within a country 

Migration

• In some countries migration can lead to an imbalance in the population structure e.g. the UAE has significantly more males than females 

• Rapid population growth caused by migration can lead to

  • Increased pressure on services such as healthcare and schools resulting in increased costs for government

  • A shortage of housing which generates social issues in society

  • Increased traffic congestion, which is a negative externality

  • Increased water and air pollution, which are negative externalities

  • Food shortages