In 2010, I asked the following question on one of my blogs:Can rapid population growth contribute to economic development?” It quickly became the most read blog in the history of the World Bank as it was part of a wider controversy. At that time, most people still believed that the world had an “overpopulation problem” and adhered to one version or another of Malthus’ theorem or Paul Ehrlich’s “population bomb” theory. However, several people, including Hans Rosling, Shanta Devarajan, and I saw a very different story emerging from the data.
In our view, the “overpopulation camp” misinterpreted the effects of population growth because it misinterpreted the sources of that growth. Today, the main driver of population growth is not high birth rates (as in the past), but increased life expectancy, especially in emerging market regions. So population growth–based on “Adult Filling”, as Hans Rosling called it–is not a sign of underdevelopment, but just the opposite.
Skeptics were also wrong in assuming that an increase in the number of adults would lead to an increase in unemployment, assuming that more people compete for a small number of existing jobs. However, this “Cake misconception fixed” does not take into account economies of scale and labor market performance. Let’s illustrate this point by looking at South Africa and Japan. Both countries have almost the same number of children (aged 0-14): Japan has about 15 million and South Africa about 17 million.. However, although in Japan 1ten million adults (aged 15+) compared to South Africa’s 43 million, South Africa’s unemployment rate is ten times higher (30 percent) than Japan’s (3 percent). Clearly, there is an unemployment problem in South Africa, but it is not demographically driven (see Figure 1).
Figure 1. Demographics and jobs: the story of two countries
Today, if someone benefits from a demographic problem, these are advanced economies where opinion makers like to Elon Musk fears that we will soon face a shortage of skilled workers and ultimately risk the survival of our species. The rapid decline in fertility almost everywhere means global number of children (ageWith 0-14) reduction expectedjust below 2 bmillion today around 1.8 bmillion by 2050. The total number of children in Asia is projected to fall by 220 mmillion (from 1076 bmillion up to 855 mmillion). The rest of the world will also have 40 mmillion fewer children (down from 353 mmillion up to 312 mmillion). The only exception is Africa, which will add about 100 people. mmillion children (from 550 mmillion up to 650 mmillion) to the population of the world by 2050. Indeed, throughout Africa, the number of children is still increasing by relatively modest 1 percent in year–compared to a staggering 2.7 percent “Adult Growth”–as a result, the total population growth was 2 percent. If Africa went the way Rbest of andworld from 2000 there will be about 250 mmillion Fewer children in the world by 2050 Ffigure 2). Then the world would be a home only for near 1.5 bmillion children (25 percent decline since 2000), which would cause much more anxiety among those concerned about “Depopulation” or aboutfrom the planet.
Figure 2. Children of the world: decline in Asia, rise in Africa
Source: Projections based on data from the Wittgenstein Center for Demography and Global Human Capital (2018). Wittgenstein Center Data Explorer Version 2.0.
With improved health and sanitation, African population growth will be even higher short and medium term. I think it’s good, because this population growth is driven by adults. African economies could benefit from educational dividend because a larger group of parents is investing more (resources and attention) in a smaller number of children. In turn, since African children “skills up” and gain access to digital value chains, they will find opportunities to work in traded services. In the optimistic scenario, this educational dividend will eventually lead to jobs dividend. If that happens, the projected global demographic imbalance could be an opportunity for Africa. Firms in need for talent will find French and English speakers in just one click. Investing in Africa will help both development and bottom line.