Abstract

The population growth can affect poverty by either two channels, changing population size and age structure. This paper analyzes the effect of changing population size on poverty in Indian states. In states Bihar, Madhya Pradesh, Uttar Pradesh and Rajasthan poverty declining at a lower rate because the population growing a higher rate. In states like Kerala, Himachal Pradesh, Karnataka, Punjab and Tamil Nadu population growing at lower rates and poverty is declining at higher rate. The paper also verifying the major criticisms posed against the Head Count ratio (HCR), the common index used to measure poverty. The criticism is that it is built on the intuitions of unchanging population.

Views on Population Growth and Poverty

The multiple paths through which the population-poverty nexus could be working opens the discussion in many possible directions (Eastword and Lipton 2001). Debates surrounding the consequences of population growth on economic development can be trace back to more than 200 years since Malthus produced his famous ‘First Essay on Population in 1798. Malthus’s theory states that there is disparity between the potential growth of population and potential growth of food production. The population would be growing in geometric ratio where as food production would be growing in an arithmetical ratio, which in turn reduces the demand for laborers and real wage.

The age structure aspect of population growth emerged in the 1970s because no cross-national link between population growth and economic growth prior to the mid-1970s. Simon’s (1981) study postulates that population growth has positive effect on economic growth through increased workforce and dominate scale economies in production. Holden and Binswanger (1998) have argued that in several African countries low population density makes it uneconomic to install the infrastructure for agro0rural development, so that population and workforce increase are required to make faster growth of GDP. Recent research has looked at the linkages between population growth and poverty reduction at different stages of the transition from high to lower fertility (Birdsall 2001). When fertility starts to decline the ratio of potential workers to non-workers rises and creates window of opportunity during which high personal savings and investment become possible.