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Assessing the Relationship between Population Growth and Economic Growth

Assessing the Relationship between Population Growth and Economic Growth. Karen Chang Chih Hua Chen Jessica Chen Derek Shum Gabriela Alcaraz Dennis Yue. Overview. Problem: High population growth in developing countries Solution: Economic growth

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Assessing the Relationship between Population Growth and Economic Growth

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  1. Assessing the Relationship between Population Growth and Economic Growth Karen ChangChih Hua Chen Jessica ChenDerek Shum Gabriela AlcarazDennis Yue

  2. Overview • Problem: High population growth in developing countries • Solution: Economic growth • Expanded labor force that utilizes the productive capacity of women • Reduces the need for large families to perform the tasks of subsistence

  3. Our Research • Developing countries: higher marginal productivity • Average annual growth rate during 1965-99: • 4.1% in low-income countries • 4.2% in middle-income countries • 3.2% in high-income countries • Trend: low-income countries will one day exceed the GDP of today’s high-income countries • However, population growth in developing countries > developed countries • Large increase in GDP in developing countries GDP growth is offset by faster population growth • Negative correlation: economic and population growth rates

  4. Opposing Views • As income increases, both the birth and death rates decrease. • Since these forces are offsetting, the rate of population growth is independent of the rate of economic growth.

  5. Variables in the Analysis • Fertility : Birth rate • Economic Growth : GDP per Capita Growth • Regional Dummy Variables - to control for cultural differences across regions, religion dummy variables were incorporated in order to account for regional/cultural and religious differences which may influence birth rates. • Secondary school enrolment of females: incorporated based on the findings that higher female education levels contribute to lower birth rates

  6. Variable Included in the Analysis

  7. Descriptive Statistics for Numerical Variables

  8. Histogram of GDP per Capita Growth

  9. Histogram of Birth Rate (per 1000 people)

  10. Histogram of Secondary School Enrolment of Females

  11. Regional Distribution of the Data

  12. Distribution of Countries by Religion

  13. Scatter Diagrams of the Numerical Variables

  14. Correlation Results

  15. Results of First Regression

  16. Heteroskedasticity

  17. Residuals vs. GDP per capita growth

  18. Residuals vs. Secondary school enrolment of females

  19. Full Model Results

  20. Regression model results excluding Europe and N.A., Education and Catholic

  21. White Heteroskedasticity test for full model

  22. Regression birthrate vs. regional dummies

  23. Regression birthrate vs. regional dummies, GDP and education

  24. Final Regression Model

  25. Regression model considering interaction between the variables

  26. Conclusion • Negative relationship between economic growth and population birth rates • Female education levels  a negative relationship with population birth rates • Religions that discourage the use of birth control such as Catholicism and Muslim religions have a significant positive effect on birth rates

  27. The EndQuestions?

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