30-05-2012, 03:33 PM
Population Dynamics in India and Implications for Economic Growth
Population Dynamics in India and Implications for Economic Growth.pdf (Size: 440.49 KB / Downloads: 270)
Introduction
The world experienced dramatic population growth during the twentieth century, with the number of inhabitants doubling from 3 to 6 billion between 1960 and 2000. India, too, saw very rapid population growth during this period – from 448 million to 1.04 billion – and to 1.21 billion in 2010. The effects of past and projected future demographic change on economic growth in India is the main focus of this chapter. Figure 1 plots world population from 1950 to 2050, and shows the share of world population attributable to India; post-2010 data are United Nations (UN) projections.
Demographic change and economic growth
During the past decade, there have been two significant breakthroughs regarding the impact of demographics on national economic performance. The first has to do with the effect of the changing age structure of a population. The second relates to population health.
Population health
The second significant breakthrough in thinking is often summarized by the phrase “healthier means wealthier.” In other words, health and longevity are very consequential for economic performance. Although macroeconomists and economic policymakers have traditionally viewed population health as a social indicator that improves only after countries become wealthy, new thinking views health itself as an instrument of economic growth, not simply a consequence of it.
Review of technical literature
Economists have devised a number of distinct approaches to studying the determinants of economic growth. For example, Bloom and Freeman (1986) and Bloom, Canning, et al. (2009) employ a simple shift-share analysis to decompose the growth of income per worker into a portion attributable to the reallocation of labor from low- to high-productivity sectors and a portion attributable to the growth of labor productivity within sectors. An alternative and more sophisticated approach is to calibrate a production function using parameters estimated from micro data (see, for example, Young 1994, Young 1995, and Weil 2007).