Question

Fertility rates have important economic effects. Discuss two direct and two indirect effects of fertility on economic development. (1000 words)

Answer 1

The growth of human population indeed has changed the way in which economies have developed over the years. The rapid expansion in some countries whereas control in others is the core reason for them to benefit or not benefit from the exercise. Yet as they say, that too much of a good thing is bad for the economy, so is the case for fertility rates as well.

Economically Speaking the following are two direct and indirect effects on the economy: -

Direct Effects: -

1) Increase in Availability of Labour Supply.

In simple terms, increased rate of fertility would mean additional people to work in the labour force. This would lead to an increase in the availability of manpower in a country. Countries such as China and India are core examples where fertility rates are high and the supply of labour is also relatively more making them manufacturing hubs that they are today.

2) Higher Demand

The economies where population is relatively higher, the net effect is that demand is also extremely high in volume. Countries such as India and China today have become the hub of demand where in companies are regularly targeting their markets for increased sales volumes.

Indirect Effects: -

1) Lesser Availability of Resources: -

The end result of a large population size is that there are loads of people which do not have access to resources. This is because a countries resources are limited and only those who can afford the same would be able to purchase them.

A high fertility rate reduces the resources each one has and prices of property sky rockets.

2) Tougher Management: -

The governments find it increasingly difficult to manage people in a country with extremely high fertility rates. The cost of all major government services such as Police, Healthcare administration etc goes up and this causes expenses to occur which in most cases is difficult to control for the economy.

Please feel free to ask your doubts in the comments section.