Siena, James Paul Danielle A.

Economic Development
BSA 2 – 3 Dr. Abraham Camba

CHAPTER 6 – Odd-numbered questions

1. Population growth in developing nations has proceeded at unprecedented rates over the
past few decades. Compare and contrast the present rate of population growth in less
developed countries with that of the modern developed nations during their early growth
years. What has been the major factor contributing to rapid developing country population
growth since the Second World War? Explain your answer.
In the 18th until the middle of 19th century, Japan's population are stable on 30 million people.
Japan's population increased after the Meiji Restoration of 1868. In 1926, Japan's population
reached 60 million people, and surpassed the 100 million people in 1967. And the declining growth
rate to 1%.

The population growth in Indonesia in 2010 and in Japan in 1950 are seen to be alike where
the most population are living on the age of youth and adult, and it is interpreted into a bell-look
demographic graph (based on the illustrations provided in the pdf).

Some of the reasons why there is an increased rate of increase in population in developing
nations than developed nations are as follows:

a. The cultural, social and religious factors in developing nations lead to high birth rates.
There are some nations like Afghanistan and other Islamic nations are against birth control
measures or abortions that lead to high growth rate of population in these nations.

b. The death rates have also become lower in the developing nations due to adoption of
modern medical treatment techniques, clean drinking water facilities, better health
services and better standard of living of people.
c. The infant mortality rate in developing nations in quite higher because lack of proper
medical facilities, lack of maternal education, preference for a baby boy over baby girl and
so on.

As a conclusion, the difference or the variable factors that affected the population growth of
these nations are because of much advanced condition/situation in terms of best health facilities,
high standard of living, insurance policies, old age pensions, education facilities, and so on.

3. Explain the notion of the hidden momentum of population growth. Why is this an
important concept for projecting future population trends in different developing nations?
Hidden momentum of population growth refers to the phenomenon of continuous increase
in the population of a country even though there is fall in birth rate, where the youth becomes the
population base of potential parents.
 The underlying reasons behind this phenomenon is that it’s either a country can't expect
the fall in birth rates overnight, and second, the population pyramids shows a wide base of youth
population and goes decreasing with the rise in old population.

This concept must be understood because by knowing and assessing what already
happened, we can predict the future by avoiding the issues in the past. And since the youth are
parent-to-be, it will open the door for us to predict the future regarding the topics about family
planning, whether are they going to marry or not, having children or not, and the likes, are also
important to interpret future population growth.

5. How does the microeconomic theory of fertility relate to the theory of consumer choice?
Do you think that economic incentives and disincentives influence family size decisions?
Explain your answer, giving some specific examples of such incentives and disincentives.
The Microeconomic Theory of Fertility is a theory that family formation has costs and
benefits that determine the size of family formed. The theory of consumer choice is based on the
assumptions of given price level of the commodity and the income of household., and it says that
if the consumer is given the choice of two goods or more, then it will purchase that quantity of
both goods and more goods that will maximize their satisfaction level from the consumption of
these two goods as per their budget.

The consumption value of a family varies due to the variations of numbers of family
members, hence, if there are more members of the family, the consumption will be higher. It is
also influenced by income level households. Not a problem if a family has a fairly high income
and have many children. But it would matter if the income is not enough to meet the daily needs.

For me, economic incentives and disincentives influence family size. The pressure for the
working adult to fulfill family’s need become an incentive economy for him/her, to increase his
productivity and gain more income. It becomes a motivation for the working adults to be more
productive and bring home the bacon (metaphor to give it your all so that you can have better
outcomes).

7. List and briefly describe the principal causes of high population growth in developing
countries and the major consequences.
The principal causes of high population growth rate in the developing countries are the
following:
•Decline in death rate
•Better medical facilities
•Technological Advancement in Fertility treatment
•Immigration (results shortage in resources)
 •Lack of family planning

The major consequences of high population growth in developing countries are the
following:
•Depletion of natural resources

•Degradation of environment (rise in the amount of co2 leading to global warming and
melting of polar ice caps, changing climate patterns and rise in sea level)
•Conflicts and wars

9. Outline and comment briefly on some of the arguments against the idea that population
growth is a serious problem in developing nations.
1. Underdevelopment - if correct strategies are pursued and lead to higher levels of living,
greater self-esteem, and expanded freedom, population will take care of itself. As long as people
in developing countries remain impoverished, uneducated, and unhealthy and the social safety net
remains weak, the large family will constitute the only real source of social security

2. World Resource Depletion and Environmental Destruction - population can only be an

economic problem in relation to the availability and utilization of scarce natural and material
resources. Developed nations should curtail their excessively high consumption standards instead
of asking less developed nations to restrict their population growth. The latter’s high fertility is
really due to their low levels of living, which are in turn largely the result of the overconsumption
of the world’s scarce resources by rich nations.

3. Population Distribution - it is not the number of people per se that is causing population
problems but their distribution in space. Many regions of the world (e.g., parts of sub-Saharan
Africa) and many regions within countries (e.g., the northeastern and Amazon regions of Brazil)
are viewed as underpopulated in terms of available or potential resources.
4. Subordination of Women - women often bear the disproportionate burdens of poverty,
poor education, and limited social mobility. In many cases, their inferior roles, low status, and
restricted access to birth control are manifested in their high fertility. If women’s health, education,
and economic well-being are not improved along with their role and status in both the family and
the community, this will inevitably lead to bigger families and higher population growth.

11. Outline and comment briefly on the various policy options available to developing
countries’ governments in their attempt to modify or limit the rate of population growth.
To sum up the various policy options available to developing countries’ governments, these
are general and specific policies that developing country governments can initiate to influence and
perhaps even control their population growth and distribution, general and specific policies that
developed-country governments can initiate in their own countries to lessen their disproportionate
consumption of limited world resources and promote a more equitable distribution of the benefits
of global economic progress, and general and specific policies that developed-country
governments and international assistance agencies can initiate to help developing countries achieve
their population objectives.

I think the government should put focus on how to persuade people to have smaller
families through Media and Educational Process since it is a very effective platform for influencing
people nowadays. They could also provide symposiums regarding how to enhance family-
planning programs to provide desirable services (as better health). They can also manipulate
economic incentives and disincentives (financial penalties for having children, minimum age
child labor laws and old age social security), and lastly, they could raise social and economic
status of women because women have a significant role in the population of a country..

13. What aspects of population policy alternatives— including their strengths and
weaknesses—are illustrated by the cases of China and India?
Both countries are considered as the most populous countries. They have implemented
policies regarding birth control and such with corresponding penalties. Based on the outcome of
these policies, it is not very effective because the plan was to slow down the rate of population
growth rate, but their situation got worse. The apparent success of China’s tough fertility policies
has led some observers to see advantages of dictatorship rather than democracy in spurring
development. But in fact there are several ways in which the lack of a free press in particular and
democracy more generally has held back China’s development. However, the success of Kerala
suggests that fertility reduction may depend not on rapid economic growth or even, in its absence,
on draconian governmental policies but rather on grassroots human development that emphasizes
women’s empowerment, in which civil society plays a leading role
Siena, James Paul Danielle A. Economic Development
BSA 2 – 3 Dr. Abraham Camba

CHAPTER 7 – Odd-numbered questions

1. Why might the problem of rapid urbanization be a more significant population policy
issue than curtailing population growth rates over the next two decades for most developing
countries? Explain your answer.
The process of urbanization is taking place all over the developing and less developed
nations but at a different rate. There are countries that are being urbanized faster than the other
countries. This is because of the policies adopted by various governments.
The urbanization process is becoming a serious issue in the population policy than the rate
of population growth itself. This is so because of certain reasons:

a. The urbanization process calls for rural-urban migration. Areas that are urbanized must
accommodate an increase in the number of people on the limited available land. This means
that resources are limited in relation to the needs of the people.

b. Social costs that are caused by pollution, theft and crimes are considered more problematic
than the population growth rate and are more likely to occur in urbanized areas.

c. An increase in the number of labor in informal sector like street hawkers, labor at
construction sites, small grocery shops in highly urbanized areas does not able necessarily
contribute to the GDP of the economy, which results to development process at a low pace
despite the large labor base.

d. The urbanization process is taking place in terms of increasing slums rather than in pukka
houses. The slum population has the best of every facility but their living condition in terms
of health and hygiene is very poor.

e. People who migrated are most likely to be unskilled, while the urban areas are in need of
more skilled workers.

3. “The key to solving the serious problem of excessive rural-urban migration and rising
urban unemployment and underemployment in developing countries is to restore a proper
balance between urban and rural economic and social opportunities.” Discuss the reasoning
behind this statement, and give a few specific examples of government policies that would
promote a better balance between urban and rural economic and social opportunities.
I think the argument above refers to the rural-urban divide and how it take the problem of
migration lightly. This implies that laborers from rural to urban areas in search of jobs ends up
making the urban labor jobless and unemployed. This is because since the number of jobs is more
or less fixed, it gets to the rural laborers instead of skilled urban labor, as the rural gets employed
at lower wages.

In order to balance the rural-urban divide, the government can implement some policies
that may seem helpful. The government can take action regarding the shift agriculture to industrial
to service industry. They could reintroduce industrialization at the expense of agricultural
development. The government should also reduce urban bias development strategies and give more
opportunities at the rural sector. They could also make investment in urban industrial development
and in modern technology for rural agricultural sector. Job creation in urban areas by government
in manufacturing and services industries can also be used, as well as educational opportunities in
rural areas.

5. What is meant by the expression “getting prices right”? Under what conditions will
eliminating factor price distortions generate substantial new employment opportunities? (Be
sure to define factor price distortions.)
Factor Price Distortion is a situation in which factors of production are paid prices that do
not reflect their true scarcity values (i.e., their competitive market prices) because of institutional
arrangements that tamper with the free working of market forces of supply and demand. Through
bidding the right price of a good, the firm will receive a right amount of income and will distribute
a right amount of wages for its labors. And this circumstance will automatically increase new
employment opportunities, considering that potential-labor see the wages rate as a good offering.

7. Why are primary cities—generally the capital— often disproportionately large in many
developing countries? Which factors can be addressed with better policies?
The form of urban bias that has frequently caused significant distortions might be called
first-city bias. The country’s main or first city receives a excessively large share of public
investment and incentives for private investment in relation to the country’s second-largest city
and other smaller cities. As a result, the first city receives a large share of population and economic
activity even though it has been proved to be inefficient and ineffective.

The factors that can be considered for better policies are transport costs. The reason why
business are mostly situated at the capital is because capital are the most dense when it comes to
population and the businesses are also situated there, meaning, the costs for transportation are less
tan doing business outside the capital. Another factor to consider is that usually, capital cities are
highly urbanized, meaning, they have good infrastructure than those in the rural areas.
Businessmen and foreign investors are more attracted to places which they seem are more secure.

9. Suppose that potential migrants make decisions only based on comparisons of their
expected incomes. Now suppose the rural wage is $1 per day. Urban modern sector
employment can be obtained with 0.25 probability and pays $3 per day. The urban
traditional sector pays $0.40 per day. Using this information, and making assumptions as
needed, can you make a prediction about whether there will be any rural-to-urban or urban
to-rural migration? Explain your reasoning, stating explicitly any simplifying assumptions,
and show all work. Consider an approach that calculates an expected income in the urban
sector of 0.25(3) + (0.75)(0.40) = 1.05; and note that this exceeds the rural wage of 1—would
you predict that there will be rural-to-urban migration? What simplifying assumptions are
needed to make this a valid conclusion? Now, what would the urban traditional sector daily
income have to be to induce no net rural-urban migration? If wages in all sectors are
inflexible, what else adjusts in this model to lead to equilibrium (how much does it adjust
and what is the intuition)?
Rates of rural-urban migration in developing countries have exceeded rates of urban job
creation and thus have surpassed greatly the absorption capacity of both industry and urban social
services. Based on the given data above, the result might vary on the condition of the cost of living
in a country, particularly in rural and urban areas. Most probably, if the urban are pays more than
the rural area, then it will cause rural-urban areas because the laborer will be able to fulfill more
of his needs and have a surplus in his budget. In addition to that, migrants will also choose to live
and work in an urban area because they want additional benefits including higher chance of skill
advancement, training, greater liquidity in the job market, and cultural and social benefits that are
not available in the rural environment. We can also take into consideration that those who migrate
tend to be young and relatively educated, thus, there are some positive effects like they tend to
send remittances home, therefore supplementing income of rural relatives.

11. Now explain the economic benefits of concentration of economic activity in cities. How
are various costs of doing business likely to be affected? Why are some of the potential
benefits of urbanization lost when congestion becomes substantial? What policies are likely
to strengthen or weaken the opportunities to take advantage of the economic benefits of
cities?
The economic benefits of concentration of economic activity in the cities are reduced
transportation costs, ease of doing a business, easier and faster flow of economic transactions due
to relatively close business locations, there is a higher possibility of increase in sales and
profitability due to denser populations. The potential benefits of urbanization are lost when
congestion becomes substantial becomes the reason why urban cities are most preferred to do a
business is due to its ease of access, if the transaction is not as smooth as it used to be, its advantage
over other cities, as well as in rural areas, then businessmen may choose whether to continue their
business in the urban area or place it into the rural area.

Some policies that may be beneficial to the urban areas is that there should be
implementation of policies regarding those who can enter the market, hence, they must be skilled
or qualified and has means to do a business. However, the disadvantage of this policy is that the
unskilled workers who were able to work in urban areas are paid less than skilled, hence, they are
more efficient when it comes to workforce.
Siena, James Paul Danielle A. Economic Development
BSA 2 – 3 Dr. Abraham Camba

CHAPTER 8 – Odd-numbered questions

1. What reasons would you give for the rather sizable school dropout rates in developing
countries? What might be done to lower these rates?
The countries that are included and considered as developing are poor. The reasons for
sizable school dropout rates in developing countries may be the children in the poor family are
sent to work at an early age to support the family income rather than sending them for studies, the
families are poor and thus, cannot bear school expenses, the poor children also fall sick and cannot
bear the cost of medicine. Thus, it leads to long absenteeism. The other reason attached to long
absenteeism is early marriage of girl child, and the children are slow learners and many a times
not patiently handled by their teachers. This type of treatment demotivates them to attend the
school and thus, we experience dropouts.
Since mostly, the main problem of the students are financially, the government must ensure
free and compulsory education for children up to a specific, age, or complete at least secondary
level. After this level, the government must create and influence the private sector to create
attractive scholarship schemes that can be introduced for further studies. The schools to must also
implement a policy about free mid-day meals, books and school uniform for the children so that
they do not have bear any expenses, and the school should organize regular and free medical check-
up for the school children so that necessary medication can be given to the unhealthy children at
the right time. A subsidy which aims to end the problem of child labor such as monetary assistance
by going to school might also be helpful.

3. It is often asserted that educational systems in developing countries, especially in rural

areas, are unsuited to the real social and economic needs of development. Do you agree or
disagree with this statement? Explain your reasoning.
I agree with this statement because based from what I know and the reality, rural areas are
in an environment where it is composed of farm and non-farm populations. Hence, the ducation
that they have been receiving might not be useful for them, especially to their social and economic
needs. Therefore, these families send their children to study, however, due to some reasons like
financial difficulty and lack of motivation, they are subject to early dropout.
Because of this dropout, the children who were sent to study does not receive the
knowledge he must have obtained through higher education, thus, the jobs that will be suitable for
him won’t pay that big and gain some good amount of income. At this rate of globalization era, a
multilingual, multi-skilled people are highly demanded by companies, and since they are dropped
out and have no ability to reach any higher education, their skill won’t be developed and thus they
cannot afford the world’s requirement of skilled labor.
5. What is the supposed rationale for subsidizing higher education in many developing
countries? Do you think that it is a legitimate rationale from an economic viewpoint? Explain
your answer.
As a college student, the introduction of scholarships really helps the students to be able to
study in college. Since that higher education’s cost is very high, the main goal is to improve human
resources that the nations have so that there will be much more skilled human resources to improve
national development. In a way, this can be viewed as an investment by the government because
this will result to a better work force since these students will receive proper training and sufficient
knowledge.
The reason why a country needs skilled and literate workers is that because a literate nation
is able to develop faster as the ability to understand the changes taking place around the world is
more amongst its population and they easily adapt to these changes. If there is more number of
educated working class, the number of working population grows due to which the government is
able to generate more revenues from them in the form of taxes. The revenue so generated is used
for infrastructural development of the nation and making investments elsewhere. The educated
nation will also bring the social benefits as well like equal status between males and females,
female contribution to the workforce, educated generation, better care of health, and so on.

7. What do we mean by the economics of education? To what extent do you think educational
planning and policy decisions ought to be guided by economic considerations? Explain,
giving hypothetical or actual examples.
Economics of education means that the system of education is imbued with the practical
application of economics wherein macroenvironmental forces and microenvironmental forces
must first be assessed and interpreted before coming up with a decision to alter or change the
education system for improvements. The educational planning and policy decisions must always
be in lined with the suggested solutions for the economic problems as foreseen by economists.

For example, for an agricultural country like the Philippines and neighboring Southeast
Asian countries, it is necessary and recommended to push through agricultural related courses and
education since agriculture is one of the main source of income of the country. By putting
investment to students by giving them the opportunity to study agriculture, they will be given a
choice whether to pursue and apply what they have learned or not.

9. What are the links among educational systems, labor markets, and employment
determination in many developing countries? Describe the process of educational job
displacement.
The link among educational systems, labor markets, and employment determination in
many developing countries is the ability of the country itself to give its constituents the right to
education. Through education, these three are connected in order to produce an effective
workforce. The people are given an education that aims to prepare them to be ready for the
corporate world or to establish their own business in the market. Without proper education and
training, the people won’t be able to be picked to a job that might suit him. The education systems
are used in order to determine who gets the job and who doesn’t. on the other hand, the labor
market, can be composed of skilled and unskilled workers. However, companies have preference
for the skilled and educated workers over the unskilled and uneducated since the job they are
offering requires expertise and knowledge in a certain field, although there are times that unskilled
workers may also know about that without proper education but through practice.

11. Describe and comment on each of the following education development relationships:
a. Education and economic growth: Does education promote growth? How?
Education promote economic growth because through education, companies are given the
opportunity to choose workers who are qualified and skilled enough to execute the job they were
expected to do. In addition to that, jobs that are offered to those who have received education have
higher pay than those for unskilled workers, meaning if more people are accepted to these jobs,
they will be able to raise their standard of living because they’d have higher income.

b. Education, inequality, and poverty: Do educational systems typical of most developing

countries tend to reduce, exacerbate, or have no effect on inequality and poverty? Explain
with specific reference to a country with which you are familiar or investigate.
Public education on most developing countries are not affected to poverty, but, the access
to it. Typically, the government implement the education system without any preference over the
rich or poor. However, the cost of education is the one that hinders the people from receiving it.
Typically, private schools have the education system altered and engineered towards a specific
objective. Just like in the Philippines, the Department of Education and Commission on Higher
Education set out objectives for educational institutions around the country. However, private
institutions are given the privilege to follow or to alter these based on their own preference.

c. Education and migration: Does education stimulate rural-urban migration? Why?

Education stimulate rural-urban migration because urban areas opens more opportunities
for job, growth, and improvements. Usually, rural areas are self sustaining. However, due to the
changes brought by modernization, people eventually have to adapt, or they won’t be able to catch
up with these changes and be left behind in the primitive world.

d. Education and fertility: Does the education of women tend to reduce their fertility? Why?
Women, if given the proper education will be able to have a say and participate in family
planning. Based on the previous chapters, women who are able to receive proper education are
most likely aware of the consequences of bearing a child without a proper plan of raising a family.

e. Education and rural development: Do most formal educational systems in developing

countries contribute substantially to the promotion of rural development? Explain.
 There are branches of education that aims to help and promote rural development, such as
urban planning methods, agriculture, aquaculture, and courses that are directed towards the needs
of those who live in the rural areas.

13. What explains the large gains in health and education in recent decades?
Human capital is the term economists often use for education, health, and other human
capacities that can raise productivity when increased. The impact of human capital investments in
developing countries can be quite substantial. The governments of countries have chosen to invest
on human capital in order to improve the well being of their workers, thus, improving their
productivity and effectiveness as part of the workforce.

15. What are the most pressing health and education challenges today? What makes them so
difficult to solve?
Developing countries face a much more crippling disease burden than developed countries,
especially regarding infectious diseases. AIDS, malaria, and parasites are three major problems.
Some diseases are especially deadly when combined with other diseases.

These makes it difficult to solve because most of these diseases does not have any known
or effective cure. In addition to that, developing countries that are affected by these diseases, their
people does not have the financial ability to cover hospital bills whenever they ask for treatment.
According to the data on the pdf, the interaction between malaria and acute respiratory infections
or anemia is also deadly. Another important lethal interaction is between AIDS and tuberculosis.
Failure to control either of the diseases makes each more likely to be fatal. Moreover, the spread
of HIV has been demonstrated to be significantly promoted by the presence of other sexually
transmitted diseases, whose sores facilitate viral invasion.

17. What are the consequences of gender bias in health and education? Can a large gap
between male and female literacy affect development? Why?
Education of girls has also been shown to be one of the most cost-effective means of
improving local health standards. Inferior education and health care access for girls shows the
interlinked nature of economic incentives and the cultural setting. Greater mothers’ education,
however, generally improves prospects for both their sons’ and daughters’ health and education,
but apparently even more so for girls. Increasing women’s education not only increases their
productivity in the workplace but also results in greater labor force participation, later marriage,
lower fertility, and greatly improved child health and nutrition, thus benefiting the next generation
as well.

19. What are the strategies being discussed to address the problem of child labor? What are
the strengths and weaknesses of these approaches?
The strategies that are being discussed to address the problem of child labor are as follows:
the first approach identifies child labor as an face of poverty and recommends an emphasis on
eliminating poverty rather than directly addressing child labor. Next is the second approach, which
emphasizes strategies to get more children into school, including expanded school places, such as
new village schools, and conditional cash transfer (CCT) incentives to induce parents to send their
children to school. The next is the third approach, which considers child labor inevitable, at least
in the short run, and stresses palliative measures such as regulating it to prevent abuse and to
provide support services for working children. And last, the fourth approach, most often associated
with the ILO, favors banning child labor.

For the first approach, its strength is that it will help bring up the data that says poverty
levels are decreasing. However, this does not solve the problem of child labor because usually, the
effects of development does not reach all those who live below the poverty line. The second
approach might bring students to actually go to school, however, student may also be tempted or
forced by their family to not waste resources on education and use the CCT for themselves instead.
The third approach is good for the workforce, however, it will influence the youth that it might be
okay to stop receiving education because they can already earn money without education and for
the last, it is good to prevent child abuse, however, companies who relies on exploiting children
for workforce will suffer.

21. What can government do to make health systems more equitable?

The government should conduct more missions on sending doctors and medical team on
rural areas or hard to access areas because these people does not have the privilege and do not have
the access to good quality healthcare that they must receive. In addition to that, additional
information about healthcare must also be added to the curriculum of the educational institutions
in order to promote and make the students informed about the increasing problems related to health
that might affect them, and be able to know what to do, where to go, and why is there a need for
good quality healthcare.