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296Part Three. Factors of Growth

in dependency ratios, largely as a result of increased ratios in those over 64 years. One example is Japan, experiencing a low fertility rate combined with a high life expectancy. The percentage of Japan’s population over 64, which in 2005 was 19.9 percent, is expected to reach 22.5 percent in 2010, 27.8 percent in 2020, and 29.6 percent in 2030 (National Institute of Population and Social Security Resarch 2002:13).7 LDCs’ dependency rates, high now, will fall with reduced fertility but will rise again because of an increased percentage of persons aged 64 and over. East Asian and Middle Eastern LDCs’ rising dependency ratios from increased aging will occur in the second decade of the 21st century; Latin America’s in the 2020s, South Asia’s in the 2030s, and Africa’s, with the highest fertility rate, even later.

In light of the world’s aging population, Philip Morgan asks (2003:589–603): “Is

low fertility a twenty-first century demographic crisis?” It is a problem, but the “kind of problem one would like to have,” and certainly not a crisis, at least not yet (ibid., pp. 599–600).

Overall, neither Malthusian pessimism or Simon’s optimism is warranted. Simon’s model fails to consider how population growth increases the costs of agricultural resources, congestion, environmental degradation, labor force underemployment, and the burden of dependency. By contrast, the two centuries since Malthus wrote have demonstrated that technological innovation, capital accumulation, and birth control more than compensate for diminishing returns to fixed land.8

Recent econometric studies do show that high fertility and rapid population growth hinder economic development in developing economies (Birdsall, Kelley, and Sinding 2003). Robert Barro’s (1997:13–25) cross-country empirical study of nearly 100 countries from 1960 to 1990, including one regression for the late 1980s, shows that the increased resources devoted to child rearing instead of production contribute to the negative relationship between population growth rate and income per capita.9 Population growth is likely to hamper growth in the first few decades of the 21st century in Africa and parts of South Asia unless economic, population, and environmental policies change.

7Knodel and Ofstedal (2003:677–698), who plot the gender gap in life expectancy by continent, ask the same question that visitors to homes for the aged ask today: “Where are the men?”

8 However, in the relatively unsettled areas of Asiatic Russia, inland Brazil, Australia, and Canada, population growth may be subject, other things being equal, to increasing returns and growing per capita income, resulting from increased division of labor. Indeed, Birdsall, Kelley, and Sinding (2003: 69) find a positive relationship between population growth and per capita output growth among DCs.

9Regressions of the effect of population growth on the growth of GNP per capita, from 1965 to 1987, in Razin and Sadka (1995:8) provide support for this inverse relationship. However, regressions of the effect of population growth on economic growth, 1965 to 1984, in Bloom and Freeman (1986:403– 405), provide no support for either population growth’s positive or negative effect. The findings of Barlow (1994:153–165) are more mixed, indicating that whereas past fertility rates are positively related to economic growth, present population growth is negatively related to economic growth. Goodfriend and McDermott (1995:116–133) find that population growth may increase or decrease GNP per capita, depending on the relative size of the preindustrial and market sectors. Income per capita is an average of output from a diminishing-return preindustrial technology and an increasingreturns market technology. By contrast, the enhanced neoclassical growth model of Mankiw, Romer, and Weil (1992:407–437) shows that higher population growth lowers income per capita because the available capital must be spread more thinly over the population of workers.

8. Population and Development

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Strategies for Reducing Fertility

Increasing urban congestion, rapid labor force growth, a high dependency burden, and uncertainty about food output growth indicate the importance of limiting LDC population growth in LDCs. The only possible approach here is a reduction in fertility. Let us examine two strategies: (1) birth control programs and (2) socioeconomic development.

BIRTH CONTROL PROGRAMS

From time immemorial, societies have had available a number of contraceptive methods. Intercourse without penetration and coitus interruptus have been known and practiced in one form or another in nearly all societies. Abortion; high celibacy rates; no marriage at all; late marriage; sanctions against the remarriage of widows; and taboos against coitus outside marriage, while nursing an infant, or on certain religious holidays have all been used to reduce fertility. Ireland, with land and food shortages throughout much of the 18th, 19th, and early 20th centuries, had less and later marriage than other parts of Europe. In the early 20th century, the average Irish bridegroom was over 30. Marriage had to be postponed until the son could obtain land and independence from his father.

Moreover, a large number of premodern cultures have practiced infanticide (a control on family size, although not on births). In some preindustrial cultures, a newborn child is not considered a member of society, so that destruction of the child is viewed psychologically in much the same light as some Westerners view abortion.

Furthermore, chemical and mechanical contraceptives were known and applied in many primitive and peasant societies. Women in 19th-century Martinique and Guiana rather effectively used a douche containing lemon juice mixed with a decoction of the husks of the mahogany nut. However, some of these contraceptives – the vaginal insertion of an okralike seed pod, rags of finely chopped grass, or dung – were clumsy, sexually unsatisfactory, or unhealthy. By and large, the technology of preindustrial societies was not equal to providing a chemical or mechanical contraceptive that was cheap, satisfactory, effective, and readily available (Davis and Blake 1956:211–235).

But as most of these societies had high mortality rates, population growth rates were low anyway. However, maintaining a stable population today requires lowered fertility rates and more adequate contraceptives. Because of the cost of modern contraceptives and their social benefits, many LDC governments subsidize birth control devices, so that users receive them free or for a nominal cost.

Modern contraceptives. In past years, the abortion-inducing drug, the injectable drug, the oral contraceptive (the Pill), the morning-after pill, the intrauterine device (IUD), arm implants, transdermal gels and patches, abortion, and sterilization were all used as methods of birth control. Condoms, diaphragms, spermicides, coitus interruptus, and the rhythm method are cheap but less effective than the first grouping.

298 Part Three. Factors of Growth

Male sterilization via vasectomy, which involves a 10-minute out-patient operation with local anesthesia, is relatively inexpensive. It is usually irreversible, safe, and has no effect on subsequent sexual performance. Vasectomies have been widely used in India. Female sterilization, a more expensive and more serious operation, is rarely performed in LDCs (although post-1980 India is an exception).

The IUD is an effective contraceptive and, except for male sterilization, the cheapest (although it has to be inserted by medical personnel). However, because of high rates of expulsion or removal, use of the IUD requires follow-up. A study in the early 1970s in Lucknow, India, indicates that less than one-half of the women using IUDs retained them for as long as a year and only about one-fourth for as long as two years (Uppal 1977:48); IUD retention is not much longer today.

The oral contraceptive, nearly 100 percent effective if taken on schedule, is more expensive than the IUD. The Pill must be taken daily except for an interval of several days per month, a difficult system for people in both DCs and LDCs.

Abortion is expensive and, where illegal, is performed under conditions hazardous to the woman’s life and health. However, it is a widely used method of birth control, as indicated by estimates of three abortions for every ten live births in the world today. In 2001, in Hungary, a nominally Roman Catholic country, there were 6 abortions for every 10 live births; in Russia there were 15 abortions for every 10 births (Johnston 2004). Today, about 60 percent of the world’s population live in countries where abortions are legal.

Family-planning programs. The Population Reference Bureau (2003) estimates that 59 percent of the world’s married women of child-bearing age use (mostly modern) contraceptives. Robert Cassen (1994:6) estimates that 100 million or 15 percent of the world’s couples, in which women are of reproductive age, wish to limit their fertility and need to be provided improved access to contraceptives. LDCs comprising 95 percent of their population have official family-planning programs to reduce population growth. India established a program in 1951, Pakistan in 1960, South Korea in 1961, China and North Vietnam in 1962, and a wave of others occurred thereafter (World Bank 1984i:127). In 1979, there may have been as many as 40 million new users of birth control devices and methods provided by family-planning programs worldwide, including sterilizations, IUDs, the Pill, abortion, condoms, or others.

The six Asian countries – China, Taiwan, South Korea, Thailand, Indonesia, Sri Lanka, and Vietnam – whose total fertility rates (1.9–2.5) are almost as low as those in richer countries (see Figure 8-8) all launched family-planning programs in the 1960s that substantially reduced fertility rates during the subsequent decade. In 1962, China advocated “birth planning” to protect the health of mothers and children. During the Cultural Revolution from 1966 to 1976, many neighborhood groups collectively set targets for births and awarded the privilege of having babies to “deserving couples.” Even in rural areas, where contraceptives dispensed by health care centers included “paper pills,” sheets of water-soluble paper impregnated with oral contraceptives, over one-half of the couples practiced contraception. The “one couple, one child” policy, adopted in 1979, includes an array of rewards and sanctions, from community

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299

pressure and intimidation (sometimes from designated grandmotherly figures) to deprivation of educational benefits and job opportunities. The policy was enforced more or less in urban areas, but rarely in rural areas. China’s birth control programs reduced the crude birth rate from 36 per 1,000 in 1960 to 19 in 1986 (a greater success than India’s).

In 1963, Vietnam was the first Southeast Asian country to implement family planning, launching a “One or Two Child Policy” after unification in 1975. In 1973, contraceptive users as a percentage of women of reproductive age exceeded 50 percent in Taiwan and reached 30 percent in South Korea. This progress in family planning contributed to a decrease in crude birth rate from the lower 40s to the teens per 1,000 in both countries between 1960 and 1988. Sri Lanka’s relatively strong family-planning program resulted in a decline in the birth rate from 36 to 24 per 1,000 between 1960 and 1988, whereas Indonesia’s program was instrumental in a reduction from 47 to 28 and Thailand’s in a fall from 46 to 29 during the same period (Ehrlich, Ehrlich, and Holdren 1977; World Bank 1979i:56–58; Population Reference Bureau 1988; Gulhati and Bates 1994:71–72; Simons 2001).

Some of the momentum in support of LDC family planning was lost after 1990. U.N. Secretary-General Boutros Boutros-Ghali, under pressure from LDCs’ increasingly ambivalent about family planning, issued a draft Agenda for Development in 1994 that indicated that population growth was a potential problem but remained silent on population policies (Population and Development Review 1994a:683–686). From 2002 to 2004, U.S. President George W. Bush canceled funding for the U.N. Population Fund and imposed a “global gag rule,” baring international familyplanning organizations that receive U.S. aid from using their own funds to discuss abortion with patients, provide abortions, or lobby to change abortion laws in their country.

Negative externalities in childbearing. Chapter 5 mentioned external economies or externalities, cost advantages that an individual or firm conveys to other units within the economy. Negative externalities or external diseconomies are costs that an actor (for example, a couple) imposes on the rest of society. By having more children, a couple may increase its voice in local decisions, its claim to village common resources, and its economic security (especially during old age). At the same time, for society, more children diverts spending on physical and human capital, increases environmental degradation, and reduces wages (by increasing labor relative to other resources) (Birdsall 1994:256–261).

Negative externalities associated with childbearing mean that for a couple, the cost of preventing an extra (marginal) birth exceeds the benefit, whereas for society the benefit of preventing a marginal birth exceeds the cost. In this situation, society would gain by the state subsidizing contraceptives for family-planning programs so that the relationship between marginal cost and marginal benefit for a couple corresponds to the marginal cost–benefit relationship for society.

Cost-effectiveness of family-planning programs. How cost-effective are familyplanning programs? Does the social marginal benefit of a program exceed its social

300Part Three. Factors of Growth

marginal cost? Suppose the present value of benefits from preventing a birth is $100, a figure equal to the saved hospital, medical, food, educational, and other costs minus the expected earnings of the person whose birth was prevented.10 Assume the cost of providing contraceptives to prevent one birth amounts to $50. If a subsidy of $40 induces a family not to have another child, program costs would still be only $90 per prevented birth, $10 less than the $100 the birth would cost a society.

Simulation models developed by Stephen Enke (1960:239–248; 1966:44–56) indicate high returns to investment in birth control programs. As a result of slowed population growth, labor force growth also slows – decreasing the ratio of labor to capital and natural resources and increasing labor’s marginal productivity. In addition slowing population growth reduces the ratio of nonworking dependents to the economically productive population (a ratio discussed earlier in this chapter). Nevertheless, Enke’s models overstate the returns to family-planning programs. Frequently, they attribute to these programs prevented births that would not have occurred anyway because traditional methods of birth control would have succeeded. The models also understate the increased cost per user as the programs reach out to families resistant to birth control and overstate the net benefits of a prevented birth to society. Underestimating overhead costs in the population centers and understating the present value of future earnings are also problems (Zuvekas 1979: 92–93).

Motivation to limit family size. A successful family-planning program requires more than making a supply of contraceptives available; it also requires a demand for birth control. A number of programs in developing countries, especially in highly populated South Asia, have had only a limited impact on reducing fertility, partly because of a lack of motivation to limit family size. India’s program encountered active resistance during the early 1960s. Opposition, which led occasionally to riots, had numerous causes. The programs were directed by Western instead of local medical services. Frequently, religious and ethnic minorities viewed the program as discriminatory, and peasants believed that it was contrary to their economic interests. However, India’s program was reorganized in 1965 with strong governmental support. Incentive payments were increased. For example, transistor radios were given to the users as well as persons who “motivated” the use of the birth control devices. A “cafeteria” approach to contraceptive methods and devices was used. Funding increased, so that by 1975 there were 50,000 family-planning centers and subcenters throughout the country. Nevertheless, despite the effort, the birth rate fell from 44 to only 33 per 1,000 between 1960 and 1988, a drop not much in excess of countries investing little in family-planning programs. Furthermore, the public outcry following a sterilization

10To obtain present value, evaluate the present worth of each part of the stream of future receipts and

expenditures. Thus, if the interest rate is 15 percent, the present value of earnings of $5,000 18 years into the future is $5000/(1 + .15)18, or $404.03. The present value of $1,000 spent on food, housing, health care, schooling, and other items 8 years into the future is $1000/(1 +.15)8, or $326.90. Once the present worth of future receipts and expenditures for every year is known, simply add together all these separate, discounted values. See Chapter 11.

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301

campaign in 1976 and 1977 set back the entire family-planning program by more than a decade.

The varying success of organized family-planning efforts in developing countries indicates that making contraceptives available is not enough to reduce fertility rates. Couples will not use contraceptives unless they are motivated to limit births. The next section discusses ways in which socioeconomic change affects birth control decisions.

SOCIOECONOMIC DEVELOPMENT

Children in a peasant society. In most low-income countries, especially in South and Southeast Asia, farming is predominantly peasant agriculture. Peasants cultivate bits of land they usually do not own. Agricultural methods are traditional, technology stagnant, and little capital is available. Compared to their counterparts in urban society, children in a peasant society are more likely to be perceived as an economic asset. Boys as young as 8 to 10 years tend or herd animals, weed, pick, and sell produce. Girls fetch water, prepare meals, tend to younger children, and sometimes farm. Children place fewer economic demands on a peasant family. Food is raised domestically; housing is constructed by the family from local materials; and the cost of education, entertainment, and travel is negligible. Although the family may receive a dowry when a daughter marries out of the village, major financial security is usually provided by sons, who add to the family’s farm output or earn money from trade or another occupation. Having a larger family permits more income and asset transfer to balance temporary deficits or surpluses. When social insurance is inadequate, the larger the family, the smaller the risk of a poverty-ridden old age.

The literate, urban white-collar worker in South and Southeast Asia is more likely to limit family size than is an illiterate peasant in the same region. Consider, for example, the family in a two-room apartment in Delhi, India, with husband and wife employed and their children expected to get an education. The cost of children is more for this family than for one in a less densely populated village in rural southeastern India. Childrearing, particularly when children are too young to attend school, interferes with work for women outside the home. In addition, children are more likely to interfere with the urban worker’s aspirations for a better job or geographic mobility.

Indian village values support high fertility. In much of rural India, the status of the new bride in her husband’s village is tied to having children, especially sons. A son not only provides added security for old age but also performs essential religious rites on the death of a parent.

As child mortality rates fall, fewer births are needed to achieve any given desired family size. Parents may need only two to three children to be virtually certain of a surviving son, in contrast to the six to eight essential when death rates are high.

In general, modernization affects the birth rate. For example, as Table 8-3 indicates, fertility in India declines with increased education (especially of women), income, urban living, and improved occupational status. This argument supports Nobel laureate Gary Becker’s (1991:141) view that the change in the demand for children rather than the supply of contraceptives is the primary cause of the change in fertility.

302 Part Three. Factors of Growth

TABLE 8-3. Average Number of Children Born per Couple, by Selected Characteristics, in India, 1961–65 (by income, education, residence, and occupation)

 

Average number

Characteristics

of children

 

 

Household income and expenditure (1960–61)

 

Up to Rs 10 per month

3.40

Rs 11–20 per month

3.02

Rs 21–30 per month

2.95

Rs 30 and over per month

2.70

Educational level attained by women (1961)

 

Illiterate

3.5

Primary school

3.4

Secondary school

3.1

College

3.0

Postgraduate

2.5

Residence (1963–64)

 

Urban

3.19

Rural

3.76

Occupation of head of household

 

Agriculture

4.4

Industry

4.2

Professional – law, medicine, teaching

3.7

Average for all occupations

4.3

Source: Uppal 1977:41.

Income distribution. A number of studies indicate that fertility is lower when income distribution is more even. Income redistribution to lower classes increases the percentage of the population above the poverty level. Increased economic security and higher income for the poor mean having children is not the only way of securing one’s old age. Higher absolute incomes and redistribution policies (discussed in Chapters 6 and 7) increase lower-class literacy, mobility, and urbanization, factors reducing birth rates. Thus, in Taiwan, high enrollment rates in schools, which reduce child labor, were associated with lowered fertility (Simon 1976:36–76). Furthermore, with allowances for time lags, low birth rates increase income equality by decreasing unemployment and increasing per capita expenditure on training and education.

Taiwan and the Philippines illustrate this relationship between income distribution and fertility. In the early 1970s, per capita income in Taiwan was approximately the same as in the Philippines. However, there was a considerable discrepancy between the income distribution in the two countries. The top 10 percent of the population in the Philippines was significantly richer than the same group in Taiwan, but the bottom 20 percent was more than twice as well off in Taiwan. Moreover, in comparison to the Philippines, which had a high farm tenancy rate, in Taiwan, as a result of

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303

land reform in the 1950s, nearly all farmers owned their land. These facts explains why Taiwan’s fertility rate has continued to be substantially lower than the Philippines’ (Rich 1972/73:10–15; Johnson 1994:503–531). More people had reached a socioeconomic level in Taiwan that promoted birth control. And income inequality is lower in low-fertility South Korea (which also had a low farm tenancy rate), Taiwan, China, Thailand, Indonesia, Sri Lanka, and Cuba than in high-fertility Venezuela, Mexico, Colombia, Panama, Peru, Ecuador, El Salvador, and Honduras (Figure 8-2).

Religion. When factors measuring modernization are held constant, religion explains few cross-national fertility differences. Thus, fertility rates in predominantly Roman Catholic Latin America, France, Portugal, and Poland given their level of development, are about what demographers would expect. And Catholic Spain and Italy had the lowest total fertility rates in the world, 1.2, in 2003.11 Yet religious (prolife) politics (along with a belief that population was neutral in development) influenced the U.S. government, previously the major donor to LDC population programs, to refuse to finance family-planning programs in LDCs, 1984–1992. Washington feared that aid to these programs might promote or condone abortion or coercive population control. This withdrawal of U.S. aid reduced funding for the U.N. Population Fund and other family-planning programs in LDCs. In 1994, President William J. Clinton rescinded this policy. The following year, the United States Agency for International Development (USAID) identified “stabilizing world population growth and protecting human health” as one of the five areas that were keys to sustainable development (Hendry 1988:32; Population Reference Bureau 1995; Population and Development Review 1993:215–216; Population and Development Review 1994b:483–487). In 2002, the U.S. government again withdrew funding for LDC family planning.

A summary of variables. Interestingly enough, a study by Anne D. Williams (1976:117–157) indicates income is not important in reducing fertility rates when other factors are held constant. How then do we explain the negative relationship between per capita income and fertility in Figure 8-8? Variables positively associated with income, such as education and literacy, occupational status, women in the labor force, urbanization, and income equality, are all negatively correlated with fertility. By contrast, child mortality rates and children in the labor force – negatively related to income – are positively associated with the birth rate.

The role of women. A major theme of the International Conference on Population and Development, held in Cairo, Egypt, in 1994, and the World Summit on

11Greece and several transitional countries of Eastern and Central Europe and the former Soviet Union had the same TFR.

The Philippines is an exception in which religion influences fertility rates. “Continued ambivalence and resistance at the national level on the merits, the morals, and the means of birth control” by President Gloria Macapagal Arroyo and Philippine political leaders (Tarmann 2004), under pressure from the Roman Catholic church, contributed to the closing down of some family planning clinics and women’s health care clinics, increasing illegal abortions and affecting the Philippines’ TFR, 3.5, compared to 1.9 for East and Southeast Asia generally (Population Reference Bureau 2004).

304Part Three. Factors of Growth

Sustainable Development, in Johannesburg, South Africa, in 2002 was that countries wishing to reduce birth rates should empower women socially and economically. Female equality is associated with high levels of female education and labor-force participation, both variables related to low fertility.

DEVELOPMENT OR FAMILY PLANNING?

What policies then can a developing country pursue to lower fertility rates? Programs promoting social and economic development by improving health, nutrition, education, female rights, and urban development will lower fertility rates. In addition, improving income distribution – including more educational and job opportunities for women, the underprivileged classes, and lower-income groups – will also contribute to a reduced birth rate. In a sense, lower fertility is a by-product of strategies widely considered socially desirable in themselves.

Which is more important in contributing to reduced fertility, family planning or socioeconomic development? We cannot choose one as more important, as birth reduction depends on both. Birth control devices offered by family-planning agencies will not be accepted if the social and economic circumstances of the population are such that reduced fertility does not seem an advantage. By contrast, people wanting smaller families must have access to birth control devices and information. You can either argue that China’s TFR fell from 5.6 in the early 1970s to 1.7 in 2003 because of vigorous family planning or rapid socioeconomic development. Or you can either contend that Nigeria’s TFR only declined from 6.3 in 1977–81 to 5.8 in 2003 because of “a failure of Nigeria’s population policy” (Obono 2003:109) or negative real per capita growth in the last quarter of the 20th century (Chapter 6).

Developing countries serious about reducing fertility need both family-planning programs and policies promoting socioeconomic development and increased income equality.

Development and population are interacting variables. Each affects the other.

Conclusion

1.Population growth in the second half of the 20th century, especially among LDCs, is unprecedented in human experience. Yet, since 1960, population growth has decelerated. The developing world has a current population growth rate of 1.6 percent yearly. More than one-half of the world’s population lives in Asia.

2.The demographic transition is a period of rapid population growth occurring between a preindustrial, stable population characterized by high fertility and mortality rates and nearly equal birth and death rates in a late modern period. The fast growth takes place in the early transitional stage, when fertility rates remain high but mortality rates decline.

3.Contemporary LDC population growth has been faster than that of the DCs during their early transitional period because of a sharper drop in mortality rates in LDCs. Today’s developing countries were able to take advantage of advances in food production, new pesticides, improvements in transport and communication,

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improved nutrition, better personal hygiene, medical innovations, and immunization in a short time – many of which were not available to DCs during their early demographic transition.

4.Fertility decreases with economic development, urbanization, industrialization, mobility, literacy, female labor force participation, reduced income inequality, and greater family-planning efforts. However, these efforts are not likely to be successful unless socioeconomic development and improved income distribution make birth control seem advantageous. Development and family-planning programs have both contributed to the decrease in LDC fertility rates since the 1960s.

5.The young age structure in LDCs means that their populations will continue to grow even after the average woman of childbearing age bears only enough daughters to replace herself.

6.Malthus’s predictions that population would outgrow food supply were wrong in the past because he did not foresee that technological change, capital accumulation, and voluntary birth control would maintain a safe food and population balance. Present agricultural production is sufficient to feed everyone on earth adequately. However, deficiencies in food distribution among and within nations, inadequate agricultural research, and limited energy make future food availability in LDCs rather uncertain, especially in sub-Saharan Africa.

7.Simon, who contends that population growth stimulates technology, division of labor, and economic growth, argues against a LDC government population policy. However, Simon’s assumptions contradict the second law of thermodynamics, which states that the world is a closed system with ever-increasing entropy.

8.Increased urbanization and congestion, rapid labor force growth, growing unemployment, and high dependency burdens are some major costs of high fertility rates and rapid population growth. That 30–35 percent of LDC population is 0–14 years old compared to only 15–20 percent in the DCs means that resources have to be diverted from capital formation to take care of the young in the LDCs.

TERMS TO REVIEW

Consultative Group on International Agricultural Research (CGIAR)

crude birth rate

crude death rate

demographic transition

dependency ratio

family-planning programs

global public goods

Green Revolution

international network of agricultural research centers

laissez-faire

Malthusian view

negative externalities

population age pyramid

population momentum

replacement-level fertility

stationary population

total fertility rate (TFR)

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