The economics of a sustainable population

• Ross Guest
• Information and Research Service, Parliamentary Library

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29 November 2010
This paper provides an overview of the economics of a sustainable population and addresses some key policy issues in an Australian context. It is argued that a sustainable population is one that is consistent with sustainable economic development.

The population age distribution is shown to be more important than the population growth rate itself. The age distribution directly impacts average living standards through the ratio of workers to consumers and may also affect labour productivity. The population growth rate itself, however, contains little useful information. Indeed the search for an optimal population growth rate is a futile exercise, as is the notion of Australia’s ‘carrying capacity’. There are simply too many uncertainties and value judgements required to make such calculations useful—for example, what factors (social, cultural, environmental, economic) to include in social wellbeing and how to measure them, how to value the wellbeing of future generations, how to value contemporaneous gains and losses to various groups in society, economies and diseconomies of scale, the different effects of fertility and immigration as population drivers, and the importance of both the spatial and age distribution of the population in the transition from one population growth rate to another.

A population policy framework however could be useful. Population is a mediating factor in a wide range of public policy areas such as health, education, urban and environmental planning, and infrastructure development. A population policy could guide and connect these decisions.

About the Author

Ross Guest is a Professor of Economics at Griffith University, an Adjunct Professor with the Australia and New Zealand School of Government (ANZSOG), and a Teaching Fellow with the Australian Learning and Teaching Council (ALTC).