Washington, D.C. (June 1, 2021) – A new analysis from the Center for Immigration Studies examines the relationship between population growth and per capita GDP growth over the last two decades. The analysis finds that, in developed countries, faster population growth is associated with lower rates of per capita economic growth, and slower population growth is associated with more per capita economic growth. One of the likely explanations is that by increasing the supply of workers, population growth reduces the incentive for businesses to invest in labor-saving devices and techniques, thereby slowing productivity growth.
A larger population almost always results in a larger aggregate economy. More workers, more consumers, and more government spending will make for a larger GDP. But the standard of living in a country is determined by per capita (i.e., per person) GDP, not the overall size of the economy. If all that mattered were the aggregate size of the economy, then a country like India would be considered vastly richer than a country like Sweden because it has a much larger economy. In reality, per capita GDP determines a country's standard of living.
Dr. Steven Camarota, the Center’s director of research and author of the analysis, said, “The new Census numbers showing slower population growth have prompted many commentators to call for more immigration to increase population growth, which they claim will stimulate economic growth. In reality, there is no evidence that population growth makes a country richer on a per capita basis. In fact, our analysis, as well as other research, shows that slower population growth seems to foster more per capita GDP growth than does faster population growth.”
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