[Economic growth and changes in the structure of the population]. / El crecimiento economico y cambios en la estructura de la poblacion

PIP: A reevaluation of classic works by Simon Kuznets and Wassily Leontief suggests that their conclusions concerning the interrelationships between economic growth and population structure correspond to relatively highly specialized characteristics of present forms of capitalist development or underdevelopment and not necessarily to capitalist development within a new international economic order or to socialist development. Kuznets' work seems to offer conclusive proof of the negative effects of rapid population growth on economic development for 3 reasons: 1) requirements for capital are greater, 2) total production and per capita consumption are greatly reduced with high dependency ratios, and 3) rapid growth in consumption is more difficult when the population is growing more rapidly. However, at least 4 problems are noted when Kuznets' ideas are applied to the 3rd world. Kuznets assumes that growth of physical capital is the only source of growth, so that only increased investment can increase returns. Secondly, assuming the same ratio of capital/output for all cases assumes that no substitution of labor for capital is possible. Third, the assumption that participation rates remain the same regardless of dependency ratios may be incorrect. And finally, the difference in per capita consumption that Kuznets attributes to differences in rates of population growth represents a tiny proportion of the total gap in the standard of living of rich countries with slow population growth and poor countries with rapid growth. Kuznets' argument has considerable validity in Third World countries which relay on traditional patterns of capitalist accumulation, but the problems represent the effects of rapid population growth only under the current modes of capitalist expansion. The negative effect of high fertility on savings has probably been greatly exaggerated, and the problems of providing educational facilities and health care for ever larger numbers of persons have been poorly conceptualized. To the degree that employment security, decent salaries, and social programs for the elderly are provided, as they are at present only in socialist countries of the Third World, the incentives for large families will be reduced. The work of Leontief, based on a computer model with 2625 equations, demonstrates that regardless of the rates of population growth in Third World countries, little change in the gap between rich and poor countries can be expected in the foreseeable future.^ieng

Population growth, life-cycle saving, and international differences in steady-state optimal saving rates.

Life-cycle savings theories have been a seminal development in analyses of the relationship between rational savings patterns for individuals and the accumulation of wealth or capital at the level of the society as a whole. Applications of the theories in industrialized countries never investigated the significance of large differences in birth and death rates across societies. The strong demographic components of life-cycle saving analysis are here the center of focus. Illustrative general numerical applications of a modified version of the life-cycle approach suggest that mortality differentials comparable to those presently encountered among nations are consistent with very large differentials in steady-state optimal ratios of wealth-to-income. Specific application to Peru of the model estimated by Tobin for the United States indicates that high levels of mortality, current Peruvian birth rates, and Peruvian age-income profiles imply optimal rational savings rates far below those of the United States.