Impact of Per Capita Income Growth on Population Growth: A Cross Sectional Analysis

Abstract

A number of writers contend that rising per capita incomes will reduce birth rates and solve problems of high population growth in developing countries (see, for example, Clark and Simon). This contention is attractive because family planning programmes that may conflict with some religious and ethical values need not be implemented. But the contention is dangerous if it is wrong. Even if developing countries temporarily achieve per capita income gains, failure of such gains to retard population growth can eventually offset advances in total income and relegate developing countries to low per capita incomes and undernutrition for years to come. The purpose of this paper is to test empirically the null hypothesis that the population growth rate is not influenced by the per capita income growth rate. This hypothesis has been addressed in the past on both deductive and empirical grounds. Microeconomic theoretical analysis suggests that higher family income results in higher fertility rates (Becker). Some empirical evidence supports this conclusion (Adelman). However, other empirical studies report negative income elasticities of fertility (Ben-Porath, for example).