Macroeconomics, Poverty, Population and Development
Half of the improvement in economic
growth attributable to population has come from cashing
in the demographic bonus, the other half from shifting
economic consumption towards the poor (12).
Many mechanisms contribute to this effect: for example,
lower fertility increases women's participation in the
labour force and helps improve family health and nutrition.
Smaller family sizes reduce dependency ratios within
families and increase incentives to acquire income beyond
the basic necessities of life.
Long-term demographic and economic data from 45 developing
countries show that high fertility increases poverty by slowing
economic growth and by skewing the distribution of consumption
against the poor. Reducing fertility-by reducing mortality,
increasing education and improving access to services, especially
reproductive health and family planning-counters both of these
effects. The national effects on poverty reduction are clear from
both average GDP increase and consumption figures.
The average poverty incidence in 1980 was 18.9 per cent, about
one in every five people. Had all countries reduced net fertility by
five births per thousand women of reproductive age during the
1980s (as many Asian countries did), poverty incidence would have
been reduced by a third, to 12.6 per cent, or one in eight.
MEETING THE NEEDS OF THE ELDERLY POOR
the main threat to the well-being of older persons.
Many of the 400 million people over age 65 in developing
countries live below the poverty line. To meet the Millennium
Development Goal of halving the proportion of people living in
extreme poverty by 2015, poverty reduction strategies must
focus on the poorest and most vulnerable older persons, especially
women, and on breaking the poverty cycle that runs from
one generation to the next.
The experience of poverty in childhood and adulthood
deepens with age. People who have endured a lifetime of poor
diet, multiple pregnancies, inadequate reproductive health care
and arduous physical labour are likely to enter old age in ill
health. The inevitable physical decline brought on by ageing
reduces each person's ability to contribute to the household
and to remain economically self-sufficient.
Population ageing is an inevitable consequence of the shift
from high to low birth and death rates, which is occurring
much faster in developing countries than was the case with
An effective response to older people's needs, expectations
and rights requires action to:
- provide adequate health services for older persons;
- eliminate violence against older women and men;
- support the care-giving services older persons provide,
especially women's care for grandchildren orphaned by
- strengthen social protection schemes, and ensure
that older persons are provided with appropriate
- support research on population ageing, especially its
gender and sociocultural aspects and its implications.
Guided by the ICPD Programme of Action and the Millennium
Development Goals, UNFPA advocates for mainstreaming
ageing issues into the development agenda, with a
particular focus on the needs of the older poor and the excluded,
especially women.See sourcess
Country studies reinforce the conclusion.
In Brazil, 25 per cent of those born in 1970 are poor.
If fertility levels had stayed as high as they were
early in the century, this would have been 37 per cent.
The reduction in poverty is equivalent to what would
be gained from a 0.7 per cent annual increase in per
capita GDP (13).
FEWER EXPENSES, MORE OPPORTUNITIES The positive redistribution
effect comes first, from slower growth in outlays on
children's basic needs and education, and second, from more opportunities
for poor households to increase their labour contribution,
income and savings. Growing consumption across the board helps
poor households because it increases demand for labour, which
raises wage rates-even for families whose own fertility does not
decline. Slower growth in the rural labour force lowers demand
for land (reducing the cost and slowing the unsustainable fragmentation
About half the estimated decline in poverty comes from
increases in economic growth and half from the consumption side.
The impacts can be considerable. A fall of 4 per thousand in the net
birth rate, for example, would translate into a 2.4 per cent decline
in those living in absolute poverty in the next decade.
DIFFERENT STAGES OF THE TRANSITION The effects vary at
different stages in the transition from high to low fertility and
mortality. At first, when mortality declines and more infants and
children survive, expenditure on childhood needs increases and
economic growth slows. As fertility declines and population growth
slows, economic growth increases.
In the early stages of transition the gap between poor and
other households may actually widen, because fertility decline
starts among the better off and they reap the greatest benefit from
it. As poorer families join in the transition (which has been slow
to happen in many parts of the world) poverty and inequality start
Increasing inequality in the early
stages of the demographic transition has a particular
effect on those near poverty. It takes just a small
decrease in resources or increase in needs to push them
over the line into poverty (14).
High fertility, moreover, appears to have a greater
impact on the depth than on the frequency of poverty
The poorer the country, and the higher fertility is when it
starts to decline, the greater the contribution of reducing fertility
to reducing poverty. The beneficial effects increase as the demographic
transition proceeds. The faster the fertility decline,
the larger the potential benefits of the demographic bonus, but
the shorter the time available to take advantage of it.
SUPPORTING FACTORS Demographic changes interact with
markets, institutions and government policy. The impact of fertility
declines on poverty will be stronger where labour markets
and school systems are working well and parents are prepared to
invest in their children's education.
Economic and social policies matter. Combined with access to
reproductive health information and services, they can accelerate
Changing opportunities for women reinforce the effects
of the demographic bonus as the age structure changes. Female
labour force participation also contributes to economic growth,
particularly when wages are fair and declining fertility is linked
to increased women's employment.
Rising levels of women's education and increased demand
for labour by a growing formal sector increase the "opportunity
cost" of high fertility-women lose income and other opportunities
by having more children. Higher education levels and fertility
declines can combine in a positive feedback in which the
labour force increases faster than the growth of the workingage
EFFECTS OF DEMOGRAPHIC TRANSITION ON THE POOR The
effects of the demographic transition vary for different groups.
Poorer couples, acting according to their perceptions of their best
strategies for survival and success, start their families earlier,
have more and more closely spaced children and over-compensate
for high child mortality.
FAMILY SIZE NORMS Family size and family welfare relationships
are not only matters of individual choice and behaviour.
Choices are affected by social norms, patterns of gender relations,
public policies and institutions.
In the past, large families were the norm. Once a woman
was married, her fertility was not a matter of choice. A woman
who had many sons was honoured and secure: sons (and to
a lesser extent daughters) were perceived to be a blessing. They
were needed for their economic or household contributions,
to give assistance in old age, and for performance of cultural practices.
Today, such rationales are losing force.
Larger families drain poor people's
capacity to provide for children. Whatever economies
of scale they provide-sharing living space or handing
down clothes, for example-are outweighed by increased
expenditures and competition for scarce resources. (Over
70 per cent of consumption income for families near
the poverty line is devoted to food (16).
As governments seek to collect fees and revenues for
a range of services, including education, health and
transport, the disadvantages increase.
The poor lack education in general and education about health
in particular. They also lack access to treatment for illness and
funds for care. Poor populations begin mortality decline later than
their wealthier counterparts. Their incentive to reduce fertility
lags even further.
These delays impose further burdens
on the poor. There is a higher risk of malnutrition
associated with birth intervals of less than two years
in households with little property. Losses to health
and education are considerable (17).
MISSED OPPORTUNITIES With better health care, better
and more accessible services, more education and wider choices
for women, millions of people in many countries have opted for
The poorest have missed these opportunities.
They do not get the information or support that would
allow them to recognize the changes that favour smaller
family sizes and larger investments in the health and
education of fewer children (18).
As a result, they expect benefits that large families
no longer provide-returns from child labour, for example.
They still see a need for the "insurance effect" large
families used to provide, although today's children
are much more likely to survive until their parents
are elderly. Women and girls in poor families who have
little part in decision-making and resource allocation
bear the higher costs of high fertility, but they do
not benefit from the immediate gains when fertility
falls. They are less likely to challenge the conditions
that restrict their access to reproductive health information
The poor need investments that strengthen services and institutions
and increase opportunity for all, particularly for women.
These investments will promote better health, allow parents to
have the number of children they wish, encourage further declines
in desired fertility and enable better education and life choices.
The process will hasten the accumulation of the "human capital"
needed for accelerated and sustainable development. The challenge
is to ensure that the poor are included in these opportunities.