Aging Presentation - Effects of Rapid Population Growth on...

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Unformatted text preview: Effects of Rapid Population Growth on Labor Supply and Employment David E. Bloom and Richard B. Freeman Method of the Paper Discussion of ideas from literature regarding population growth and development Analysis of trends in graphs Overall look at how developing countries have coped with the growing population and future ability to do so Evaluation of whether population growth helps or hinders development Questions Does data support the population neutralist, population optimists, or population pessimist view of effects of population growth on development? How have developing nations been absorbing the increase labor force? Empirical Model Divided into four income groups Divided sometimes by geographical location (according to World Bank) Used data primarily from 1960 and 1980 Lowincome economy < $410 $410< LowMiddle income economy < $1650 $1650 < UpperMiddle income economy Industrial Market Income Economy average income is $11070 Table 1: Growth Rates of Population and Labor Force All of the developing economies have had extremely high growth rates 19621980 no developing economy had labor force growth rate in excess of population growth rate Table 2: Gross Labor Force Participation Rates for Males and Females Labor force participation for men in industrial market exceeded developing nations Male participation in the middleincome economies is lower than that of lowincome Women's participation in the lowincome economies has been decreasing (but most likely due to bad data) Table 3: Gross Labor Force Participation Rates For Males and Females, by Geographic Region, 1960 circa 1980 Labor participation for women varies greatly among different regions Shows female participation in workforce not dependent only on economics Male participation among regions are relatively in same area Table 4: Proportion of Population Aged 1564 Developing countries have higher dependencies than industrial hindrance to development Table 7 and Table 8 Public employment is a large proportion of non agricultural workers Developing world civil servants are highly paid relative to GNP per capita Table 9: Percent Distribution of Labor Force Across Economic Sectors Agriculture is decreasing, service increasing mostly, then industry Table 10: Percent Distribution of Labor Force Across Economic Sectors Table 11: Gross Domestic Product per Worker, for Each Sector, Relative to Gross Domestic Product per Worker in the Economy as a Whole Agriculture always has below average productivity As agriculture drops tendency for difference in productivity of industry and service sector GDP to lessen Table 13: Percent Increase of Real GDP and of the Labor Force by Sector from 1960 to 1980 GDP is a crude measure of productivity GDP has been increasing faster than labor force growth rate Means that developing countries have been expanding productive capacities within sectors Table 14: Regression Estimates of the Effects of Population Growth on Measures of Economic Growth and Development in Developing Countries Shows that connection between various variables of economic growth and population growth is weak Effects of Increase in Labor Force Experinece of Market Economies Baby Boom Population reaches working age, literature theorized that the large labor force sized would have "adverse implications for labor market experience" Ways to cope Lower relative wage Diminished employment opportunities Industrial Market economies did one or both to different extents Labor Absorption Three Ways Government Policies External Demand for Labor Arable Land and Natural Resources Main Conclusions/Results Data supports neither the population optimists or population pessimist view Weaknesses of the Paper Some data was not available for certain countries (ex China) Data sometimes unreliable, esp. in relation to women's participation rates in economies Paper took primarily a closed economy approach in its evaluation of trends, assumed no interaction between countries except when going down to a country by country analysis Strengths of Paper Recognized when data was faulty Examined data both from geographic area view and income Possible Extensions and Future Directions Reexamine relationship between different countries/view all data from an open economy view because ability to absorb has a great dependence on other countries Go back and look at data including that from recent years and see if data still supports ideas Table 5: Ratio of Average Agricultural to Average Manufacturing Wages ...
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