Policymakers often ask how high fertility and related demographic variables affect and are affected by poverty. The popular view in the 1960s and 1970s—that fertility decline would slow population growth in developing countries and thus reduce poverty—came in for a great deal of criticism in the 1980s, and by the 1990s, it was no longer in vogue. The alternative perspective that emerged was that demographic considerations are largely irrelevant to poverty reduction.

Today, new thinking and fresh evidence challenge this view. Much of this research shows that demographic trends are indeed important. However, the potential benefits of slower population growth depend on the timing and intensity of demographic change, the economic and social status of women, and the type and focus of economic policies in countries undergoing demographic change.

The World Bank estimates that in 1998, more than one billion people lived on less than one dollar per day (Table 1).¹ When we exclude China from the estimates,* we see that there were almost 106 million more very poor people in the world in 1998 than there were a decade earlier. The world's total population is projected to increase by another three billion people by the middle of this century, with almost all of this growth occurring in the poorest countries. As global economic growth has stalled, demographers and economists have been examining more closely the role played by rapid population growth in explaining the differences between countries that are reducing poverty and those that are not. Such efforts may help to identify the policies and program interventions that are most likely to reduce the numbers of people worldwide who are extremely impoverished.

POVERTY LEVELS AND TRENDS

Both the level of poverty and the rate at which it has changed vary greatly by region (Table 1). In Sub-Saharan Africa, the region with the most rapid rate of annual population growth and the lowest level of contraceptive practice, there appears to have been no progress at all in reducing the level of dire poverty: The proportion of Africans living on less than one dollar per day did not change at all between 1987 and 1998. Two other regions with the same rapid rate of population increase and similar levels of contraceptive use—the Middle East and North Africa, and South Asia—have widely differing rates of economic growth. As a result, between 1987 and 1998, the number of people living on less than one dollar per day declined in the first region and increased in the second.

The AIDS epidemic has further complicated the task of interpreting data on poverty trends, particularly in hard-hit countries in Africa. AIDS has reversed many of the gains in life expectancy in those countries, but it has also slowed population growth substantially. Additionally, because AIDS mortality is concentrated in the working ages and has been killing many trained people (teachers, for example), the epidemic is undermining those countries' poverty reduction efforts. The long period between infection with HIV and the onset of AIDS has created a vicious demographic cycle: The peak of infection occurs among young adults. They have children, of whom some become infected and die, but most live on as AIDS orphans and are exposed to the same risks when they reach young adulthood.

VIEWS ON GROWTH AND POVERTY

There are two major contrasting views about the relationship between population growth and poverty:

• Some believe that high fertility causes poverty and that lower fertility is the key to reducing poverty. At the end of the 18th century, Thomas Malthus and his followers argued that high fertility and poverty went hand in hand. Malthus himself, focusing on the impoverishing effects of scarce land and rising food prices, urged couples not to marry and have children unless they could afford to support them.²

One and one-half centuries later, when population growth rates in developing countries were accelerating as a result of high fertility and declining mortality, Malthus's successors (dubbed "neo-Malthusians") took another tack. They argued that because high birthrates create large numbers of children relative to the number of working adults, savings that might otherwise be invested in the country's infrastructure and development instead must be diverted to meeting the immediate food, health care, housing and education needs of growing numbers of children and adolescents. This prevents countries and families from making the longer-term investments needed to help lift them out of poverty.

Using this argument, neo-Malthusians played a key role during the 1960s and 1970s in efforts to mobilize the world's wealthy developed countries to provide financial aid to support government-administered family planning programs in developing countries. Through such international assistance policies, governments and nongovernmental organizations in developing countries with rapid rates of population growth received support that enabled them to develop or expand access to family planning services.³

• Others, however, believe that economic policies determine poverty reduction and that contraception is a "private good." Not everyone agreed that expanded family planning programs would be effective in reducing poverty. Economists were quick to point out that even if high fertility and high proportions of the population living in poverty were correlated, this correlation would not imply causality. In fact, the relationship could run in the opposite direction: Poverty could be the cause of high fertility. Poor people often want more children because children represent wealth, provide household labor and are the only form of social security available to parents in their old age.

Furthermore, economists questioned whether reduced rates of population growth actually have positive effects on savings and investment. They pointed out that even though the population in developing regions doubled between 1950 and 1985, this had not prevented many countries in those regions from raising overall living standards.⁴

In the mid-1980s, an influential review of the evidence on the link between population and economic development conducted by the National Research Council concluded that while demographic factors might play some role in determining a country's prospects for economic progress, they were of limited importance compared with such considerations as poor economic policies, bad governance, corruption and the lack of natural resources.⁵ This high-level report further undercut the rationale for supporting family planning programs on the grounds that these would help reduce poverty. By 1990, few economists believed that the population factor mattered. In the view of such skeptics, decisions about family size and reproduction are a private issue, and contraceptive practice is a "private good" whose supply is better left to market forces than to government bureaucrats.⁶

Proponents of this view, however, overlooked important factors affecting a woman's ability to regulate her childbearing by using contraceptives purchased through the private-market system: the sheer unavailability of contraceptive supplies and services in some parts of the world; cultural and religious opposition to birth control, which often inhibits free individual choice; the high cost of many contraceptives relative to family income; and women's unequal educational and social status in most parts of the developing world.

Unempowered women are often unable to act on their own behalf to obtain contraceptive services to regulate their childbearing; they are also the group most likely to believe that bearing many children will provide a bulwark against poverty in their old age. This points to the urgent need to improve women's education and job prospects if they are to assume greater control over their lives and move out of poverty. Programs that combine social and economic development and family planning services for poor women encourage them to have fewer children and thereby enhance their prospects of achieving a different, less-dependent kind of life. Such programs also provide women with the tools they need to attain those two goals.

POPULATION GROWTH AND POVERTY

New Links at the National Level?

Recent research has looked at the linkages between population growth and economic growth at different stages of the transition from high to lower fertility.⁷ One of the most important findings of this work is that when fertility begins to decline, the process creates—but for only a limited period of time—a demographic "window of opportunity" during which increased personal savings and investment become possible.

When fertility is high, the proportion of the population made up of children and teenagers is large relative to the share made up of working adults. (This is called the age-dependency effect.) As fertility rates drop, the ratio of potential workers (people aged 15-64) to nonworkers (people 14 or younger and people aged 65 and older) rises, meaning that more workers are responsible for fewer children. The reduction in the ratio of youthful dependents to working-age adults should enable countries to increase their stocks of physical and human capital (schools and well-trained teachers, health care facilities and well-trained health workers, and modern communications networks and well-trained workers to staff them).

However, opening a demographic window of opportunity does not guarantee a surge in economic growth. For one thing, it is temporary, because low fertility will eventually increase the proportion of another dependent group—the population made up of older people who are no longer working. The intensity of the age-structure effect depends on the speed with which the transition to low fertility takes place. It also depends on countries' pursuing sound economic and social policies, to enable the large wave of potential workers to acquire skills and find productive employment. When this happens, as it did in countries like South Korea and Taiwan, a temporary surge in the accumulation of physical and human capital contributes to a rapid rise in living standards.⁸

One of the main questions raised by research on East Asia is whether countries in other regions will experience a similar economic boost. Research on the effects of rapid fertility decline in Latin America raises some cautionary signs. Economic growth has been slower in Latin America than it was in East Asia in the 1970s, in part because of the failure of countries in this region to invest as much in education, especially for the poor. Moreover, economic policies in these countries were less conducive to the creation of productive employment for the working-age population. Similar policy failures in South Asia raise the prospect that India and Bangladesh, which are now moving into the later stages of their transitions to low fertility, may not benefit at all from the favorable demographic conditions created by those transitions. The demographic window of opportunity is a one-time and relatively brief phenomenon (around two decades, depending on the speed of the transition),⁹ and it would be a sad irony if the successful efforts of countries to achieve lower population growth failed to reduce poverty because their accompanying economic policies were misguided or were instituted too late.

High Fertility, Rapid Growth and Poverty

Although the concerns of early neo-Malthusians that high fertility actually inhibits the efforts of poor countries to reduce poverty were discounted by many economists,¹⁰ recent studies have supported their argument. Comparisons of poor countries that experienced rapid fertility decline with those that did not find that high fertility increases absolute levels of poverty both by retarding economic growth (which reduces the possibility of growth-induced poverty reduction) and by worsening the distribution of additional income created by economic growth.¹¹

...while misguided agricultural and trade policies and poor food distribution may be the key determinants of hunger, rapid population growth exacerbates bad policies

The major conclusion of this new research is that the effects of fertility on poverty reduction differ at various stages of the transition from high fertility to low fertility, with high fertility inhibiting poverty reduction before the transition and declining fertility contributing to it during the transition. This may be one reason why simple cross-national comparisons of links between fertility and poverty levels fail to reveal much of a correlation.¹²

Critics also challenged neo-Malthusians on another suggested link between rapid population growth and poverty—possible food scarcity and malnutrition.¹³ In fact, despite a doubling in the world population between 1960 and the end of the century (from three to six billion), global food scarcity and malnutrition did not occur, thanks to dramatic improvements in agricultural techniques. Economists point out that global food production has exceeded population growth for several decades, and that food scarcity and malnutrition depend more on agricultural and trade policies and on poor people's ability to buy food than on rates of population growth. Interestingly, a recent report on the global food outlook agrees with both of these points, but also notes that malnutrition in poor countries would be substantially lower if population growth in those countries were closer to the low variant than to the medium variant of United Nations population projections.¹⁴ Thus, while misguided agricultural and trade policies and poor food distribution may be the key determinants of hunger, rapid population growth exacerbates bad policies, while slower growth may buy time for good ones to have an effect.

Family Size and Household-Level Poverty

Recognizing that demographics have a dual impact on poverty (both on overall growth and on improvements in living standards for the poorest families) raises the question of whether high fertility is an obstacle to poverty reduction within households. For example, children in large families perform less well in school and less well on intelligence tests than do children from small families. When economic class is controlled for, the correlation is approximately halved, but remains significantly negative.¹⁵

Children in large families also tend to have poorer health and lower survival probabilities, and infants born less than 24 months after a sibling are less likely to survive than those born after a longer interval. Furthermore, large family size seems to inhibit the physical development of children, possibly through lower-quality maternity care and poorer nutrition. Finally, links between family size and measures of parental welfare are less clear and vary over the life cycle; effects on the mother's allocation of time among childrear-ing, market work and leisure depend on the compatibility of work opportunities with child care. High parity increases women's exposure to the risk of maternal death over the reproductive life cycle.

As was mentioned earlier, economists have been quick to point out that correlation does not imply causality and that causality could run in the opposite direction. The failure to recognize that the linkage between poverty and high fertility operates in both directions was one of the major shortcomings of early neo-Malthusians. Formulistic arguments supporting family planning as a means of poverty reduction were an easy target for economists, who criticized both their naïve economics and their failure to recognize the important role of other factors, particularly female education, in shaping reproductive behavior. More recent research on fertility determinants has brought a more balanced recognition of the interplay of supply and demand for children and the role of family planning in relation to other proximate determinants of fertility, such as age at marriage, as countries went through the transition from high fertility to low fertility.

Despite the extensive literature on the effects of educational status on reproductive behavior, the positive impact on educational attainment that accrues when couples are able to control the number and timing of their births has received less attention. In research on the effects of Thailand's rapid fertility decline, demographers who examined this issue found that reduced fertility enabled families to invest more per child and thereby to educate each child better.¹⁶ However, they cautioned about generalizing these findings to other countries or regions: The effects were observed at later stages of Thailand's fertility transition and in a context in which the costs of education were borne mainly by children's parents rather than by the state.

This point was emphasized in a four-country analysis of the effects of excess fertility, unintended births and children's education.¹⁷ In the Dominican Republic and the Philippines, the children of couples who had had unwanted or mistimed births obtained less education. In Kenya and Egypt, however, no such effect appeared. The study in the latter two countries looked at conditions prevailing at an earlier stage of the transition to low fertility, when the costs of educating children were largely assumed by the state and did not fall directly on the parents.

These researchers conclude by pointing to a "virtuous circle" linking mothers and their children. The children of women who are able to avoid unintended or excess fertility benefit through better education; as adults, they will be better equipped to manage their own fertility and will do a better job of providing an education for the next generation. This point echoes an earlier researcher's conclusions about positive links between fertility decline and poverty reduction at the societal level: Helping women to avoid excess or unwanted fertility helps them, their children and the society in which they live.¹⁸

A puzzle in interpreting these linkages is that while the poor may indeed want more children and may not be all that irrational in doing so, they are less likely to realize the aspirations that motivated them to have children than are the better-off, whose children are better-fed, better-educated and more likely to succeed in the face of the rapidly changing economic and social conditions found in many poor countries.

New research has also broadened the scope of inquiry into the links between household demographics and welfare, with particular focus on factors affecting gender relations in society and within households. These studies reveal an interplay of forces far more complex than the links between family size and welfare outcomes. Such research points to a number of reasons why parental expectations about the benefits and costs of rearing another child may not be realized or could lead to a reduction rather than an improvement in their own and their children's well-being.¹⁹

• Public economic policies may distort markets, particularly for low-income labor, and may lead members of poor households to expect a higher return from their children's labor than is actually possible.

• The market conditions on which individuals base their childbearing decisions (for example, their expectations about the value of the labor of an extra child) may change as a result of shifting demographics (rapid alterations in the age composition of a given population associated with fertility decline, for instance) or changing economic conditions (such as new technologies or globalization).

• Because poor people are usually at the trailing edge rather than the leading edge of the processes of economic, demographic and institutional change affecting the outcomes of household decisions, they are more likely to be losers (and the rich to be winners) in the longer run.

• Poor people probably have less access to the information and fewer of the physical and human capital assets that they need to take advantage of the window of opportunity afforded by fertility reductions.

• Where women and girls are in less-powerful bargaining positions than are men and boys when it comes to resource allocation, women not only bear a disproportionate share of the costs of high fertility, but also are less likely to reap the benefits of having smaller families.

The disadvantaged position of poor women is evident in special tabulations prepared for the World Bank on two indicators from the Demographic and Health Surveys—using a contraceptive method, and having a trained birth attendant present at the time of delivery.^† They reveal large differences in both indicators between poorer women and richer women in the two regions in Table 1 that had the largest numbers of poor people: Sub-Saharan Africa and South Asia (see Figure 1). The overall proportion of deliveries by a skilled attendant was higher in Africa than in South Asia, but both had very large differentials by poverty status. South Asia had a higher average level of contraceptive use than Africa, and the gap between rich and poor was less than for having a skilled birth attendant.

One reason that the rich-poor gap is smaller for contraceptive use than for the presence of a skilled attendant at delivery is that family planning is less dependent on health infrastructure, particularly in countries like Bangladesh, where the family planning outreach effort is vigorous. Political will may also play a role in the difference between the two reproductive health indicators, because organizational obstacles to training and deploying skilled birth attendants are in principle as manageable as the obstacles that family planning organizers had to overcome in launching outreach programs.

POLICY AND PROGRAM IMPLICATIONS

The revival of interest in the linkages between fertility and poverty is motivated in part by the desire to identify economic policy and social program directions that will help the poor cope more effectively with the risks associated with rapid economic change. In addition, it is hoped that poor people can be helped to avoid making reproductive decisions that, while seeming to be in their best interest, do not in fact improve their well-being or that of their families.

Researchers have identified a number of such policy directions.²⁰ For instance, when fertility is declining, labor-market policies should create job and financial markets that promote growth with employment, so that countries will benefit from the positive age-structure effects associated with declining fertility. Countries can learn from the experience of East Asian nations that realized such gains.

Moreover, public policymakers should start by undoing existing policy-induced distortions (for example, in limitations on the private provision of services) that undercut countries' capacities to realize the positive benefits of lower fertility and to avoid the negative effects of high fertility. Economic policies that may prevent poor women and their families from realizing the positive health and welfare benefits of safely controlling the number and spacing of pregnancies also must be revised.

Developing countries must give greater emphasis to eliminating or reducing gender inequality. Moreover, to be effective, program interventions must selectively address specific needs: reducing unwanted and poorly planned pregnancies; keeping girls in school; and supporting better employment and earnings opportunities for women. Microenterprise and credit programs targeted at poor women can be designed and implemented in ways that enhance their synergistic effects, by ensuring that women have control over the money they earn and that their information and education networks reach beyond the traditional boundaries and restrictions faced by poor women.²¹

In Africa, social action programs targeted at poor households have simultaneously provided funding for family planning and reproductive health services and created paying jobs for women. An evaluation of one such program in Malawi found that it had directly improved women's reproductive health outcomes and had indirectly improved their status in the family, through its woman-focused educational, credit and employment initiatives.²²

CONCLUSIONS

Both the neo-Malthusians and their critics—who shared the same long-term goal of reducing poverty—were misled in thinking that their particular strategy would be the magic bullet. Family planning alone will not necessarily reduce poverty in developing countries, but neither will many of the present models of economic development. On the other hand, a slower rate of population growth, combined with sound and equitable economic development and the reduction of gender inequality, appears increasingly likely to achieve that goal.

While fertility decisions are a private matter, there is a role for public policy. In an increasing number of countries, public and private providers are enabling women to choose when and how many children they will have, by providing information and safe, effective means of fertility regulation. In cases where the health system fails to do this or when there is an imbalance between the individual and the social costs of reproductive behaviors, public policy needs to address these failures by improving the information and regulatory environment. Additionally, when cost is an obstacle to effective fertility regulation by poor women, subsidizing services may be an appropriate approach.

In sum, fertility and family planning do matter for poverty reduction—for poor households and for poor countries. They are not the only, or even the most important, factors in poverty reduction. The topic has been a controversial one, and critics have reacted to statements that exaggerate the links between fertility and poverty by minimizing or denying them. Thus, it is important that policymakers understand the new evidence supporting the view that lower fertility does contribute to poverty reduction, and that public policies that help poor people better manage their reproductive lives have societal as well as individual benefits.