How does High Fertility Rate Affect Prospects for Economic Growth and Poverty Reduction

A high fertility rate can have both positive and negative effects on economic growth and poverty reduction, depending on how a country manages its population growth. Here’s an exploration of its impacts:

Negative Effects:

1. Increased Dependency Ratio: A high fertility rate leads to a large number of children dependent on a relatively small working-age population. This increases the dependency ratio, meaning fewer resources per capita for investment in education, healthcare, and infrastructure, which hampers economic growth. For example, in Sub-Saharan Africa, where fertility rates are high, a significant proportion of the population is young and dependent, putting pressure on working adults and limiting savings and investment.
2. Strain on Public Services: High fertility rates place increased pressure on public services such as education, healthcare, and social welfare. In countries with limited resources, this often results in overcrowded schools, inadequate healthcare, and insufficient infrastructure, making it harder to lift people out of poverty. For instance, India, with historically high fertility rates, has struggled to provide adequate services in rapidly growing urban areas, contributing to persistent poverty in certain regions.
3. Lower Female Workforce Participation: High fertility rates often lead to lower participation of women in the workforce, as they may be engaged in caregiving and child-rearing activities. This limits the potential for economic growth by reducing the pool of productive labor. In many parts of the Middle East and South Asia, where fertility rates have traditionally been higher, female participation in the workforce has been lower, which has constrained economic growth prospects.
4. Limited Per Capita Income Growth: With high fertility, the rapid increase in population can outpace economic growth, leading to lower per capita income. As the population grows faster than the economy, poverty reduction becomes more difficult because the income generated by the economy has to be spread across more people. For example, Bangladesh historically had high fertility rates, which slowed its poverty reduction efforts until fertility rates started to decline.

Positive Effects:

1. Potential for Demographic Dividend: If managed properly, a high fertility rate can eventually lead to a demographic dividend, where a large proportion of the population is of working age, with fewer dependents. This can boost economic growth by increasing the labor force, provided that jobs, education, and health services are adequately provided. Countries like South Korea and China experienced rapid economic growth when their high-fertility generations entered the workforce, capitalizing on their large working-age populations.
2. Larger Domestic Markets: A larger population can create a bigger domestic market for goods and services, which encourages business growth and investment. This can boost economic activity if the economy can absorb the growing population through job creation. Nigeria, with its high fertility rate, sees potential in its large youth population for future economic growth if it can create enough jobs and build infrastructure.

Conclusion:

High fertility rates tend to limit short-term economic growth and poverty reduction by increasing dependency ratios, straining public services, and reducing per capita income. However, if countries can harness the potential of their youthful populations through investment in education, healthcare, and job creation, they can experience long-term economic benefits through a demographic dividend.