Population-Growth-Poverty Nexus Project: Phase 2


Code:    05-042
Date:    04/15/2005 - 04/15/2006

This research project broke down the study on the interrelationships among population, poverty and economic growth from a macro or national perspective to regional and provincial levels.

The first study The Population-Poverty Nexus: The Philippines in Comparative East-Asian Context established the linkages among population growth, economic growth, and poverty reduction. The study found out, among others, that had the country's population grown the same way as Thailand from 1975 to 2000, the country's per capita GDP could have been 22 percent higher in the year 2000. In terms of poverty incidence, about 1 million families would have not been counted among the poor in the same year. Savings of 128 billion pesos from 1991 to 2000 and 52 billion pesos from 1996 to 2000 on education and health respectively could have been realized in the same period

This project is a necessary offshoot of the preceding study. The previous study gave the theoretical framework and empirical basis for the claim that population has a significant impact on economic growth and poverty at the macro level. This follow through study established how such links fare at local levels.

These two studies gave a more comprehensive picture of the effects of population growth in the Philippines and presented important policy implications.

Main Findings of the Study

1. The higher the proportion of young dependents, the more negative and significant is the effect on income or economic growth.

2. Provinces that have a high proportion of young dependents would grow at a slower rate than provinces with a lower proportion of young dependents.

3. The number of youth dependents caused lower growth rates in per capita income. Where the proportion of the youth was lower, that province performed better in achieving its income targets.

4. There is a positive relationship between average per capita income growth rate and the rate of poverty reduction. A one percent increase in the rate of average income growth also increased the rate of poverty reduction by 1.45%. This represents 2.82M individuals taken out of poverty.

5. Given the same aggregate amount of fiscal resources, if these were distributed to fewer people, then the per capita amount would be higher.

6. The higher the per capita income, the more taxes and charges will be paid to the LGU.

7. The LGU expenditures such as health, education, social security, labor and housing are determined by the size of the constituency being served. The expenditures are therefore understood to decrease with a lower population.

8. Higher per capita income translates to increased taxes (increased revenues) and lower expenditures on social services because of a lower population base.

9. There are two ways that population management can improve welfare: (a) Increase in per capita income: via the Growth Channel, and (b) Increase in fiscal resources: via the Redistribution Channel.

Conclusions

1. The positive net impacts of population management programs can be done by provincial LGUs themselves, independent of the rest of the LGUs.

2. Ideally, if all provinces adopted an aggressive population program, the positive benefits to be gained would be tremendous.

3. The benefits of population management can be realized even at the municipal level.

Recommendations

1. Mobilize a constituency for a strong population policy.

2. Reduce fertility rate deliberately.

3. Address the population momentum challenge. LGUs can help to lead a concerted response with parents, schools, churches to dissuade the youth from early sex and pregnancies, early marriage, large families, and other similar responses.

4. Other strategies to be considered: (a)Policies and programs that encourage couples to have fewer children or to delay the age of having their first child; (b) Information-education-campaigns (IEC) to encourage couples to have fewer children or delay their first birth; (c) Policies and programs that encourage (if not require) household investments on human capital; (d)Policies that require national government and LGUs to maintain a certain quality of service provision, possibly proxied by per capita spending in real terms; (e) Policies and programs that encourage LGUs and other services providers to implement population management, and (f) Reduce cost of effort to meet desired fewer number of children.

PopDev Messages: (1) LGUs that manage population growth will see poverty levels diminish and will realize economic progress for their constituents; (2) Unchecked population growth is no longer for endless debate but for action; and (3) Population management now, means more savings for LGUs in the long run.


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