The demographic transition and economic growth: implications for development policy

Abstract

An important transition in the economic history of countries occurs when they move from a regime of low prosperity, high child mortality and high fertility to a state of high prosperity, low child mortality and low fertility. Researchers have proposed various theories to explain this demographic transition and its relation to economic growth. In this article, we test the validity of some of these theories by fitting a non-linear dynamic model for the available cross-country data. Our approach fills the gap between the micro-level models that discuss causative mechanisms but do not consider if alternative models may fit the data well, and models from growth econometrics that show the impact of different factors on economic growth but do not include non-linearities and complex interactions. In our model, mortality and fertility decline and economic growth are endogenized by considering a simultaneous system of equations in the change variables. The model shows that the transition is best described in terms of a development cycle involving child mortality, fertility and GDP per capita. Fertility rate decreases when child mortality is low, and is weakly dependent on GDP. As fertility rates fall, GDP increases, and as GDP increases, child mortality falls. We further test the hypothesis that female education drives down fertility rates rather than child mortality, but find only weak evidence for it. The Bayesian methodology we use ensures robust models and we identify non-linear interactions between indicators to capture real-world nonlinearities. Hence, our models can be used in policymaking to predict short-term evolutions in the indicator variables. We also discuss how our approach can be used to evaluate policy initiatives such as the Millennium Development Goals or the Sustainable Development Goals and set more accurate, country-specific development targets.

The sustainable development oxymoron: quantifying and modelling the incompatibility of sustainable development goals

“…Moreover, the approach would accept a temporary conflict between different capital assets and thus between socio-economic and environmental development goals as long as the overall sum of the inclusive wealth change remains positive and is expected to grow in future. The expected future increase is however difficult to estimate accurately, particular as the model does not take into account non-linear development dynamics Ranganathan et al 2015b).…”

Typology of Tropical Forest Transition Model in Several Watershed, Sumatera Island

“…From BPS data, the annual population growth rate of Riau P r o v i n c e i n t h e p e r i o d o f 1 9 8 0 -1 9 9 0 , 1990-2000,2000-2010 and 2010-2016 were 4,3%, 4,35%, 3,58%, and 2,59%, respectively. The increasing economic growth rate affects the decline in mortality, and then mortality affects the decline in fertility (Ranganathan et al 2015). The orientation of regional development along with the forest transition process has varied spatially differences in every spatial variation in the landscape level.…”

Demographic Transition in the Past and Projected Five Decades in Sub-Saharan Africa, 1967-2068: Empirical Evidence from Nigeria

“…An important transition in the economic history of countries occurs when they move from a regime of low prosperity, high child mortality and high fertility to a state of high prosperity, low child mortality and low fertility [1]. Demographic transition is a population theory that relates economic development to patterns of population growth, describing the transition from high birth and death rates to low birth and death rates [2] The transition is also an indication of a shift away from a stable and stationary stage of population [3], which begins with a decline in mortality while fertility remains persistently high, and leads to a regime of high population growth [4].…”