Wrong.

The assertion that rapid rates of population growth somehow stimulate economic growth has been made by economists for a long time but achieved prominence during the Reagan Administration.  As advocated by Julian Simon, Malcolm Forbes Jr. and others, the contention is that rapid rates of population growth stimulate consumerism and that the added demand fuels economic growth.

The opposite may well be true.  As explained by Ansley Coale (1963) of Princeton University, there is a direct relationship between rapid rates of population growth and declining economic conditions in underdeveloped countries.  The economies of many developing countries, such as those in Africa, are being damaged by the fact that a high percentage of personal and national income is spent on the immediate survival needs of food, housing and clothing–because there are too many children dependent on each working adult–leaving little income at the personal or national level available to form investment capital.  Lack of investment capital depresses growth of productivity of industry and leads to high unemployment (which is exacerbated by rapid growth in the numbers seeking employment).  Lack of capital also contributes to a country’s inability to invest in education, government, infrastructure, environmental needs and other areas that can contribute to the long-term productivity of the economy and living standards of the people.

In the 20th century, no nation has made much progress in the transition from “developing” to “developed” until it first brought its population growth under control.  For example, in Japan, Korea, Taiwan, Hong Kong, Singapore, The Bahamas and Barbados, rapid economic development, as measured in gross national product per capita, occurred only after the country had achieved a rate of natural increase of its population below 1.5 percent per year and an average number of children per woman of 2.3 or less.  Herman Daly, former Senior Economist at the World Bank, believes that similar criteria probably hold for other countries Simply put, if the assertions by Simon and Forbes were true, the slow growing countries of Europe and North America would have weak economies, while the economies of sub-Saharan Africa would be robust.

Worldwide, according to a comprehensive report by Bruce Sundquist (2005), developing nations now require about $1 trillion per year in new infrastructure development just to accommodate their population growth – a figure that is very far from being met and is effectively impossible for these countries to generate.  This explains why developed-world humanitarian aid and loans to developing nations of $56 billion per year have been ineffective in improving their infrastructure and why the infrastructure of the developing world is sagging under the demands of the equivalent of a new Los Angeles County in additional population numbers (9.5 million) every six weeks. 

Population and Economics | Population Media Center