World Population Trends and Their Impact on Economic Development

By Dominick Salvatore | Go to book overview

raising the productivity of agricultural labor. To achieve this, considerable investments in land, material capital, and human resources, as well as technological progress and institutional change, would be necessary. If technological progress is not sufficiently rapid, the increase in labor demand will fail to keep up with the increase in labor supply arising from rapid population growth. The result could be increased income inequality in rural areas.

The rapid growth of the rural labor force in the developing countries could increase the problem of rural underemployment, particularly in the face of a diminishing scope for expanding land area. High rates of population growth add to a stock of agricultural labor which is already used at very low levels of average and marginal productivity, making labor absorption much more difficult.

It is, of course, impossible to absorb increases in the agricultural labor force indefinitely in the agricultural sector. Growth in rural incomes and returns to labor will require rapid growth in nonagricultural employment opportunities. The United Nations ( 1974: 421) observed that the transfer of agricultural labor to nonagricultural sectors is an essential prerequisite for, and a basic element of, the process of agricultural and overall development.

The assertion that rapid population growth will lead to surplus agricultural labor has been questioned by Reynolds ( 1983) who noted that multicropping typically requires large investments of labor time. Hayami and Ruttan ( 1987) found that since the 1960s, increases in labor productivity have become increasingly dependent on technological progress, which, when applied to smallholder agriculture, has generally resulted in increases in labor demand. Though capital- intensive agricultural development could accelerate the growth of food production, it could also lead to further concentration of land holdings, thereby increasing the number of landless people and aggravating other social and economic problems, including high rates of urbanization.


CONCLUSION

Though the findings concerning the existence of an inverse aggregate relationship between population growth and economic growth are mixed, there may still be reason to believe that population growth may be an important, though not decisive, barrier to the economic progress of developing countries. No consensus has been reached on the net effect of rapid population growth on either domestic or foreign savings. Similarly, it is not clear whether population growth on balance promotes or retards physical capital formation. Its impact on the formation of human capital, especially education and health, is equally open to question. To what extent population growth is associated with natural resource development, economies of scale, or technological advance is similarly unclear.

It is, however, clear that population growth has not prevented the growth of per capita food production in the developing countries as a whole. But in the last decade, some low-income countries have experienced increasing malnutri-

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