Assuming equal sex ratios at birth, population dynamics according to Foley (2000) can be considered in terms of the “total fertility rate” f, and the world population will be stabled in the long run if the World fertility remains at level 2 – Replacement level of 2 children per couple. If we measure income levels by real GDP per capita of x, then the above population dynamics can be described by the f-x relationship as illustrated. The upward-sloping portion of the schedule depicts a Malthusian equilibrium positive income-fertility relationship, while the downward-sloping portion of the schedule depicts a negative income-fertility relationship based on the theory of the demographic transition. At the point f = 2, there exist two demographic equilibria: the Malthusian equilibrium (EM) with low per capita income and the Smithian equilibrium (ES) with high per capita income. The stability of each demographic equilibrium is ensured by decreasing the marginal returns to labor in the Malthusian case, and increasing the returns to labor leading to an increase in the division of labor in the case Smithian fit.
Author(s) Details:
Nguyen Anh Phong,
University of Economics and Law, Ho Chi Minh City, Vietnam and Vietnam National University, Ho Chi Minh City, Vietnam.
