Population, Poverty and Development: Review and Research Gaps

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Population, Poverty and Development Review and
Research Gaps

• Aniceto C. Orbeta, Jr.
• Philippine Institute for Development Studies

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Outline

• Population and Development A comparison of
  Philippines and Thailand
• Population and Poverty
• Philippine demographic trends
• Philippine poverty alleviation record
• Links
• Evidence
• Implications for Policy
• Research Gaps

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• Population Development Philippines Thailand
  - 1/2

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• Population Development Philippines Thailand
  - 2/2

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Population and Sustainable Development Framework
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Review of demographic developments

• Slow fertility decline slower than most
  countries in the region (Table 1)
• Average performer in mortality (Table 2)
• Continued high population growth higher than
  most countries in the region
• Implications
• Expect extended years of high youth dependency
• Demographic onus rather than demographic
  bonus like East Asia Countries

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• Fertility and Mortality in Selected ASEAN
  Countries

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Review of poverty alleviation record

• Modest gains from 44.2 in 1985 to 33.7 in 2000
  or about 0.7 annually
• Number of poor people increased from 4.6 million
  in 1985 to 5.14 million in 2000
• Gains are only clear in urban areas (declined by
  14 compared to only 4 percentage points in rural
  areas between 1985-2000)
• Inequality has not improved
• Share of poorest quintile 4.8 (1985) 4.7
  (2000)
• Share of richest quintile 51.2 (1985) 54.8
  (2000)
• Gini coefficient 0.47 (1985) 0.51 (2000)

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• Poverty and Inequality, 1985-2000

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Family Size and Poverty

• An empirical regularity that poverty incidence is
  higher the larger the family size

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Population and poverty links

• Growth Channel (Size of the Pie) Does
  demographic change (change in population growth,
  fertility, mortality, age structure, etc.)
  affects changes in the level and growth of
  average attainable well-being per person?
• Distribution Channel (Sharing of the Pie) Does
  demographic change affects the distribution of
  income given attainable well-being per person?
• Conversion Channel (Enjoyment from Share of the
  Pie) Does demographic change affects the
  conversion of attainable well-being per person
  into actual well-being per person?

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Evidence on the growth channel (Size of the pie)

• Demographic changes (decline in population
  growth, fertility, mortality and changing age
  distribution) have sizeable impacts on economic
  growth account for about half of recorded
  economic growth in Southeast Asia, one third in
  East Asia
• Fertility and mortality effects are offsetting
  mortality decline stimulates growth, rise in
  fertility attenuates growth this is the primary
  reason for the limited effect in earlier analysis
  that focus on population growth
• In the Philippines, decomposition analysis show
  that economic growth contributes bigger
  proportion in reduction of poverty in
  cross-country analysis it contributes about one
  half

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Evidence on the distribution channel (Sharing of
the pie)

• High fertility skews the distribution of income
  against the poor in cross-country analysis in
  the Philippines, there is still no direct
  evidence but indications are pointing to the same
  direction given the limited employment
  opportunities generated and the rapidly growing
  labor force
• The dilution effect appears to be not very strong
• On the acquisition effect, there are mixed
  results on the impact of an additional child on
  labor force participation of fathers but this
  leads to a decline of mothers labor time and an
  increase in her home time

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Evidence on the conversion channel (Enjoyment
from share of the pie)

• Doubts on whether poor families can freely choose
  their family size given poorer access to FP
  services, particularly for the Philippines
• There are evidence on both sides of the economies
  of scale argument
• Clear deleterious effects of large family on
  investments in human capital
• Clear increase in vulnerability with larger
  family size

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Family planning practice by socioeconomic class
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Population Growth and Human Capital Accumulation
Household Level 1/2

• Survey of developing country evidence
• King (1987)
• Children in large families perform less well in
  school
• Children in large families have poorer health,
  lower survival probabilities, and are less
  developed physically
• Lloyd (1994)
• Resource dilution with each child getting smaller
  share of family resources including income, time
  and maternal nutrition
• Diminished access to public resources, such as
  health and education
• Unequal distribution of resources among siblings

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Population Growth and Human Capital Accumulation
Household Level 2/2

• Evidence from Philippine data
• High fertility negatively affects school
  participation of older children (13-17 years old)
  although it does not affect school participation
  of younger children (7-12 years old) (Herrin
  1983, Bauer and Racelis, 1992)
• Large negative impact on boys (DeGraff et al.,
  1993)
• Expenditure per child is also negatively affected
  (Bankosta and Evenson, 1978)

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Family Size and Vulnerability

• Using the 1997 FIES and the 1998 and 1999 APIS,
  it was found that 46 of the family remained to
  be non-poor (N) while 22 remained to be poor (P)
  throughout the period. Interestingly, as one goes
  from households who remained to be poor to
  households who remained to be non-poor, the
  family size declines (Reyes, 2002).

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Implications for policy 1/2

• Demographics play an important role in poverty
  alleviation better control of fertility should
  be an important component of poverty alleviation
• While there maybe reasons why the poor have large
  families, it will be difficult, particularly for
  the Philippines, to sort which ones are due to
  lack of control over fertility and which ones are
  due to preferences better control of fertility
  is needed to clarify this
• There are intergenerational impact of current
  fertility choices primarily via lower investments
  in human capital this is the main avenue of
  intergenerational transmission of poverty need
  for pro-active subsidy and better targeting of
  public services, e.g. education and health, which
  are in themselves investments with high social
  returns apart from indirect returns through
  demographic changes

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Implications for policy 2/2

• Importance of consistent economic growth
  well-established still the primary strategy of
  development for the Philippines a conducive
  economic environment is needed to translate
  potential benefits from demographic changes
• With globalization, lower fertility is needed to
  benefit from opportunities at the aggregate and
  household levels, and to lessen the vulnerability
  of households to economic shocks
• The question to ask Is there enough reasons for
  government to intervene in fertility decisions?
  for poor households, should the with persuasion
  case in Herrin (2002) be pursued?

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Research Agenda Population, Poverty and
Development

• Improve upon the current broad brush attribution
  of the interaction between population and poverty
  for the Philippines. There is a need to continue
  to clarify the interactions, at the macro,
  community and household levels in the Philippine
  context. The objective is to find more effective
  policy handles
• Poverty, fertility management and preferences and
  its implications at the household level