Stabilization of human population through economic increasing returns

Abstract

The assumptions of declining fertility with rising income and rising per-capita output with rising population imply the existence of a stable demographic equilibrium with a high standard of living and relatively low total population. This Smithian equilibrium differs from the well-known Malthusian equilibrium in its comparative statics: technical progress lowers the Smithian equilibrium population, while it raises the Malthusian equilibrium population; a fall in fertility lowers the Smithian equilibrium income, but raises the Malthusian equilibrium income. Economic data show strong support for the hypotheses of increasing economic returns to population and declining fertility with income, and suggest that the human population of the world and per-capita output will stabilize at about 25–30% above their current size, that is, at 7−8.5 billion people, with a per-capital output of 6500–7500 1990 dollars.