GDP and Population

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Main Idea

Projected population trends can help determine the direction of economic developments.

Reading Strategy

Graphic Organizer As you read the section, complete a graphic organizer similar to the one below by identifying changes in the United States in the categories that are listed.

Key Terms census, urban population, rural population, center of population, demographer, fertility rate, life expectancy, net immigration, baby boom, population pyramid, dependency ratio


After studying this section, you will be able to:

1. Explain how population is estimated in the U.S.

2. Describe the factors affecting future population growth.

Applying Economic Concepts

Urban and Rural How do you define the words rural and urban? Read to find out how rural and urban are defined in economic terms.


Busy thoroughfare in Atlanta

Atlanta Pays Environmental Price for Fast Growth

Atlanta (CNN)—Atlanta, long known as "a city built in a forest" is becoming a concrete jungle as its trees disappear to make way for shopping malls, houses, and

3 5 million between 1990 and raw, fastest wowing counties. Developers are clear,ng an ^Zf om acres of tree-covered land per day, whrch average oi du Manhattan each year.

* prnt r co—g ti- have risen ^¿¡^Sl of iobs The average commute for the Atlanta area ¿ 35 mis round-trip per dayMonger than any other city's in the nation.

—Cminteractive, March 19, 1999

The rate at which population grows influences GDP and economic growth in several ways. First, for an economy to grow, its factors of production must also grow or become more productive. One of the factors of production, labor, is closely tied to the size of the population.

Second, changes in population can distort some macroeconomic measures like GDP and GNP—which is why they are often expressed on a per capita, or per person, basis. If a nation's population grows faster than output, per capita output falls and the country could end up with more mouths than it can feed. Or, if a nation's population grows too slowly, there may not be enough workers to sustain economic growth.

Finally, population growth affects the quality of life, especially in fast-growing areas such as Atlanta. The study of population involves more than a simple total of people.

Population in the United States

MR The Constitution of the United States £Mm~ requires the government to periodically take a census, an official count of all people, including their place of residence. Because the official census occurs every 10 years, it is called the decennial census. The nation's founders initiated the decennial census to apportion the number of representatives each state elects to Congress.

Counting the Population

The federal government conducted the first census in 1790. Throughout the 1800s, temporary agencies were created each decade to conduct the counts. In 1902, Congress permanently established the Census Bureau. Today, the Bureau works year-round, conducting monthly surveys relating to the size and other characteristics of the population.

When the Census Bureau conducts the decennial census, it uses the household as its primary survey unit. About five in every six households receive a "short form," which takes just a few minutes to fill out. The remaining households receive a "long form," which includes more questions and serves to generate a more detailed profile of the population. Bureau employees use different methods to count special groups, such as homeless persons, who do not normally conform to the household survey unit.

The Census Bureau tabulates and presents its data in a number of ways. One classification denotes the size of the urban population-people living in incorporated villages or towns with 2,500 or more inhabitants. The rural population makes up the remainder of the total population, including those persons who live in sparsely populated areas along the fringes of cities.

Historical Growth

The population of the United States has grown considerably since colonial times. The rate of growth, however, has steadily declined. Between 1790 and 1860, the population grew at a compounded rate of about 3.0 percent a year. From the beginning of the Civil War until 1900, the average fell to 2.2 percent. From 1900 to the beginning of World War II, the rate dropped to 1.4 percent. It declined slowly but steadily after that, and by 2000 the rate of population growth had fallen to approximately 0.9 percent.

The census also shows a steady trend toward smaller households. During colonial times, household size averaged 5.8 people. By 1960, the average had fallen to 3.33 and then to approximately 2.60 people today. The figures reflect a worldwide trend toward smaller families in industrial countries where couples often view children as a financial liability. The figures also show that more individuals are living alone today than ever before.

Regional Change

An important population shift began in the 1970s, with a migration to the western and southern parts of the country. These regions have grown quite rapidly, while most of the older, industrial areas in the North and East have grown more slowly or even lost population. Many people have left the crowded, industrial Northeast for warmer, more spacious parts of the country. States such as Arizona, Nevada, and Florida have grown tremendously.

The Census Bureau also tracks changes in the geographic distribution of the population. Figure 13.6 shows changes in population distribution for nine regions in 1988 and projected in 2010.

The projections show growth in the West and South and losses of population in the Northeast and Central Plains regions.

Center of Population

Another indicator of distribution shifts is the center of population-the point where the country would balance if it could be laid flat and all the people weighed the same. In 1790, the center was 23 miles east of Baltimore, Maryland. Since then, it has moved farther west. By the 1990 decennial census, the center of population had reached a point about 9.7 miles southeast of Steelville, Missouri.

Student Web Activity Visit the Economics: Principles and Practices Web site at and click on Chapter 13—Student Web Activities for an activity using international population data.


Projected Population Trends

Population trends are important to many groups. Political leaders, for example, closely watch population shifts to see how voting patterns may change. Community leaders are interested because increases or decreases in local population affect services such as sanitation, education, crime prevention, and fire protection. Businesses use census data to help determine new plant locations, markets for products, and sales territories.

Factors Affecting Population Growth

According to demographers-people who study growth, density, and other characteristics of population, the three most important factors affecting population growth are fertility, life expectancy, and net immigration levels.

The fertility rate is the number of births that 1,000 women are expected to undergo in their lifetime. A fertility rate of 2,110, for example, translates to 2.11 births per woman. The Bureau of the Census projects 2,119 as the most likely fertility rate for the United States. That rate is barely above the replacement population rate-the rate at which the number of births in a population just offsets the number of deaths.

This was not always the case. In the late 1800s and early 1900s, Americans tended to have large families. In the days before modern machines and appliances, the work of maintaining a home and family and earning a living was difficult and time-consuming. Children were needed to do household chores, work on family farms, and bring in additional money from outside jobs.

As modern life became more automated, and fewer people lived on farms, having large families became less important. As a result, the nation's birthrate dropped steadily throughout the 1990s.

The second factor, life expectancy, is the average remaining life span of people who reach a given



Figure 13.6





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