| Abstract: | This study used an econometric model, estimated from time series data, to evaluate the effects of demographic factors on the T aiwanese economy. The simulation results suggest that, in the short run, a stationary population produces significantly higher income per capita than rapid population growth; in the long run, however, rapid population growth produces a slightly higher income per capita. Under assumptions of very low fertility trends, the population size, equivalent adult consumers, and labor force can be expected to grow by no more than 50% in a century, whereas under the very high fertility trend assumptions, they would more than double. The reason that lower fertility populations produce a smaller gross domestic product per capita in the long run than the normal fertility population is that the negative effects of a slower growing labor force dominate the positive effects of a faster growing capital formation. In terms of the present values of annual income per capita, the slow growing population shows considerably better economic performance. Given the immediate economic advantages of lower fertility, it is important for developing countries with high birth rates to reduce fertility in order to produce higher per capita income effects and break out of poverty. It is considered of little importance that the slow growing populations eventually produce slightly smaller per capita. |
