Population Pressure and Implications for the Economy: A World’s Analysis of the Recent Past


This paper wants to enlarge evidence presented in the exploratory article by Enriqueta Camps and Stanley L. Engerman, “World Population Growth: The Force of Recent Historical Trends”, Journal of Interdisciplinary History, 44:4, 2014. Before the worldwide epidemic impact on mortality caused by Covid 19, world population was growing at a fast track. By 2005-2010 United Nations authorities and the World Bank were regarding population growth vis-à-vis natural resource availability as an important economic problem in the mid run. The origin of this sort of ideas dates back at least to Malthus on population pressure, diminishing marginal returns of land, scarcity of calories and therefore increase of prices. Before the first industrial revolution only epidemics could threat population growth as to loosen pressure on economic resources. The situation in the period we want to study is very different. By the second half of the 20th century the main reason behind population growth was the great improvement of life expectancies. In OECD countries life expectancies nearly doubled during the 20th century. The overall world situation was one of convergence. All continents with the exception of Africa were improving their mortality conditions. But Camps and Engerman (2014) prove that these facts were counterbalanced in years 1960-2010 by a similar in intensity but opposite in direction trend of fertility. In all continents with the exception of Africa fertility was diminishing, converging to low levels, though with some delay with respect to mortality, causing the population explosion (demographic transition). A very significant variable when explaining fertility evolution is female’s education. One year more of education of mothers led to 0,33 less children per couple. Pandemics, different marriage patterns (polygamy), poverty and a different role of children for the family economy draw a different picture in African countries. In this paper we present further quantitative evidence on the impact of population growth on the economy (prices, per capita GDP), using population growth as an approximate proxy of the aggregated demand evolution at the world level as well as the UN population growth projections till the start of the twenty first century. Since population can be considered as an endogenous variable of the economy, an IV analysis has been developed in order to obtain different and more reliable results. Our IV analysis has completed the effect of population growth with a rough estimation of its purchasing power (that is an indicator of the complete aggregate demand) by means of the IV variable gross higher education enrolment rate%. We have compared worldwide results with IV results of the continents currently representing more population pressure on supply: Sub Saharan Africa and Asia. From this analysis we have concluded that inflation rates are mostly explained by the purchasing power of demand –consumption and investment, here indirectly estimated by means our IV (gross higher education enrolment rate%)- rather than by population pressure.