YOUTH BULGE: A DEMOGRAPHIC DIVIDEND OR A DEMOGRAPHIC BOMB IN DEVELOPING COUNTRIES?

OUTLINE

  1. Introduction

(a)  Reproduction: the strongest human urge

(b)  Global population trends: a history

(c)  Malthus’ population growth model

 

  1. Causes of high population growth

(a)  Decisions on household level

(b)  Youth bulge generates population growth Inertia

 

  1. Youth Bulge is a Demographic Bomb in Developing Countries

(a)  Broken social sector in developing countries

(b)  Food shortages in developing countries

(c)  Unemployment is high because of low capital in developing countries

(d)  Global resources are divided inequitably

  1. 86% by the global wealth is owned by 25% of the population

(e)  Resource utilization in inefficient in developing countries

(f)   High population means high demand causing inflation with stagnant supply

(g)  Crime rate will be increased

 

  1. Youth Bulge is a Demographic Dividend

(a)  Labor Supply increases;

  1. Puts downward pressure on wages

(b)  High population means more global influence

(c)  Despite high population China achieved high economic growth

 

  1. Conclusion:

 

Essay

The urge to reproduce is the strongest human urge. It has always been part of the human life. Moreover, it is important to note that neither evolutionists nor the creationists deny the fact that urge to reproduce is a part of human biology. However, changes in technology and availability of medicines have changed the variables related to growth in human population. For example, introduction of medical science has decreased infant mortality rates and increased expectancy rate-leading to a decline in death rates. United Nations fund for population notes that it took hundreds of thousands of years to reach at population level of first 1 billion, whereas, it only took another 200 years for the human population to reach 7 billion. There have come many instances in the past when people have tare told that the world is going to see famine on a large scale because of high population growth and low economic growth. The most famous of them is Malthus. He argued that the agricultural growth of the world is seeing incremental changes while population growth is experiencing an exponential growth. Ti made him to propose that the people in the world will die because of hunger. However, this theory has apparently failed to hold today in the developed world, but it still seems valid for some of the countries in the world. For example, according to the Pakistan economic survey, in fiscal year 2018-19 agriculture saw only 0.8% growth while population grow with a rate of 2.4%. It should be noted that Pakistan is already a food insecure country. If this trend in population growth remains unchanged, there will be come a day when millions of people in the country will die of hunger. Youth bulge is a term used to denote high number of youth population is a country. Youth bulge is linked with high population growth because high number of young population suggests that a country will see high birth rate in the future. However, there are some people who argue that it is not only the number of youth in a country that decides population growth rate. They say that better social services decline birth rates. Moreover, employed women seem to have less fertility rates than unemployed women. Taking all the variables, that are in play, into account, it will not be wrong to suggest that youth bulge is demographic bomb in developing countries. Social sector is in broken conditions in most developing countries. This leads to more births. In addition, most of the countries are food insecure. Thus, if more population adds up to the current population, there will be more shortages of food. In addition, global resources are not divided on an equitable basis. Therefore, developing countries will not be able to meet the economic demands of the population. However, few people argue that high population is beneficial because it provides more labor. Labor is unproductive in itself. It needs capital to produce things. Therefore, developing countries will face an excess supply of labor which will deteriorate their labor market conditions.

                    Decision to have children is an economic decision a household makes. Todaro, in his book ‘Economic Development’, writes that countries where social sectors are in bad shape tend to show high fertility rates for woman. He adds that education also influences the number of children per household. In other works, educated women have lesser number of children than the ones who are not educated. The reason is that educated women forgo their earning opportunities when they have children. Therefore, on a household level decision socioeconomic status of that household and the provision of social services in a country they are living in.

Countries that have high number of youth population see a high growth in their population. It is clear that a quantity which has higher initial value than other sees higher final value than others. In other words, if a country whose population is 100 and has growth of 10% will have its population doubled in next seven years. Whereas, for a country whose initial population is 100, but population growth is 5% will take 14 years to double its population. Moreover, population growth that we discussed is linked with number of young population. In a country, because they are the ones who reproduce. Therefore, high young population is a country causes high population growth.

The social sector in developing countries is in a broken state which leads to high fertility rates and it makes youth bulge a demographic bomb in developing countries. It should be noted that high infant mortality leads to high population growth. Todaro writes in his book Economic Development that a family has children to secure their future. He adds that the first child is a consumer goods which means that a household has the first child to seek happiness, not to generate any future cash flows from it. However, a household has the rest of the children to secure its future life. Todaro calls third and second children investment goods. Therefore, with broken social systems and with high mortality rates families have more children to lower the risk of losing all of their children. In other words, youth bulge in developing countries and broken social sector that is present in the developing countries prove that youth bulge in developing countries is a demographic bomb.

                    Food shortages in developing countries suggest that if the developing countries cannot feed the existing population, it would not be able to feed more. According to the United Nations food and Agriculture Organization most of the food insecure people live in the developing countries. It adds that 800 million people live in conditions where extreme hungers have become a part of the realities that they face. Moreover, according the economic survey of Pakistan, the agriculture sector grew with a rate of 0.8% in 2018-19, whereas population grew with a rate of 2.4%. If this trend remains unchanged, Pakistan will see much difficulties in feeding its population.  Therefore, food shortages in the developing world makes the point stronger that youth bulge is a demographic bomb for them.

Unemployment is high in the developing countries because of unavailability of capital. As James stuart Mills, an English economist wrote that labor is useless until it is not complemented with a capital. Labor in itself is unproductive and it can only produce something of value when it equips itself with a machine. For example, a huge portion of the arable land in Pakistan is unirrigated. In addition, the unemployment rate in Pakistan is 6%, according to the State Bank of Pakistan. To employ this labor in the unirrigated lands, Pakistan needs financial capital to build irrigation system. It does not have enough fiscal space to build irrigation system across Pakistan. Therefore, Pakistan cannot absorb its unemployed labor to work in unirrigated fields because Pakistan does not have enough financial resources to build an irrigation system in the country.

Therefore, if a country that cannot generate enough resources to employ the labor that it currently has, it would not be able to employ more labor in the future with its current financial standings.

Global resources are divided on an unequitable basis which is leading to resource deprivation in the developing countries. Globalization has benefited economies in many way, but it has hurted them in few others. For example, it would be foolish to believe that Congo’s electronic products will be able to withstand the electronic products that are produced in the United States of America. Therefore, with less resources and with unskilled labor Congo’s economy will always see losses in the global market. Thus, an addition of labor in the markets of developing countries will not help them to revolutionize their economies because they do not get enough share from the global Income to reinvest on their people. Therefore, youth bulge in developing countries – that do not have enough income to invest on their people – is a demographic bomb.

Resource utilization in the developing countries is less efficient which means that youth bulge will be a threat rather than an asset for the countries. The under utilization of the resources leads to less income and high unemployment rate. For example, the unirrigated land in Pakistan suggests its under utilization.

                    Moreover, under utilization of resources reflect less food available. Pakistan is already food insecure and if its population rises its economy will see an immense pressure. This can lead to political instability, ethnic tensions and provincial disharmony. Therefore, youth bulge in developing countries is threat to their existence because developing countries do not use their resources efficiently.  

Supply of goods in developing countries is stagnant and high population will lead to high inflation. High population reflects high aggregate demand in an economy. Moreover, all of the macroeconomic schools of thoughts suggest that increase in demand leads to high inflation in the economy. If the population of the developing countries sees a high growth, the aggregate demand in developing world’s economy will increase. However, if these economies succeed to increase their aggregate supply, they would be able to end inflation. The developing countries have been unable to produce enough to meet the current demand. Therefore, if their populations increase, they will see a shortage of goods in their markets.

Youth bulge is a dividend in developing countries because it increases labor supply. Higher labor declines wages in an economy leading to a decline in the inflation rate. Moreover, it increases amount of good produced in an economy. In addition, higher output leads to a prosperous future. However, this idea seems flawed. Higher number of laborers decreases wage rate, but it increases aggregate demand for other goods in economy, for example, demand for food. Thus, high population leads to high inflation rate. Therefore, youth bulge is not a dividend for developing countries that cannot increase the capital available in their industries.

Youth bulge promises high population that gives more political power on the global level. It should be noted that global influence does not come with high population. Political influence comes with wealth and they ability to contribute in the modern world. For example, the population of Pakistan is higher than France, and Germany, but it does not have even a portion of influence that they exercise. Therefore, it is technological improvement that promises political influence, not the number of people living in a country.

In short, youth bulge is a demographic bomb in the developing countries. Broken social sector in developing countries makes it impossible for many people to acquire new skills or to have fewer number of children. In addition, if developing countries cannot provide employment to all of its working age population, it would be impossible for it to provide to few millions more in the future. Furthermore, with the under utilization of resources, it would be impossible for developing countries to provide enough economic opportunities to higher number of people. Moreover, huge number of people in developing countries are living below the poverty line. If aggregate demand increases, it would lead to higher inflation which would push more people into poverty. For the people living in developing world misery has become a part of the realities that they live with. To uplift the standards of the living of the citizens of the countries around the world, hones and better educated policy makers are needed who would see a human in a human, not an American, a black or an Indian.

 

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