Question

Discuss the relationship between a nation's economy and its rate of population growth.

Answer 1

If we look at the basic level, there is a clear relationship between the population growth and the growth in per capita income of any economy.

We know that per capita income is equal to the total income divided by the total population. The per capita income growth rate nearly equals to the difference between the income growth rate and the population growth rate.

Let us consider the example of Kenya. The country had a real GDP growth rate of 3.3% from 1975 to 2005 while during the same period the population growth rate was 3.2% and thus the growth rate of per capita GDP was just 0.1%. If Kenya would have had a slow rate of population growth and the similar level of GDP increase, the per capita income growth would have been quite high.

This indicates that if the developing economies try to increase their per capita GDP growth rate in comparison to developed economies they must control their population growth rate.