Essay Sample on GDP per Capita and its Impact on Population Growth

Published: 2023-03-20
Essay Sample on GDP per Capita and its Impact on Population Growth
Type of paper:  Case study
Categories: Economics Population Financial analysis
Pages: 7
Wordcount: 1810 words
16 min read

The growth domestic product (GDP) of a country is a measure of the variations on its economic and population progress. Economists suggest that the sum of population growth and per capita GDP progress indicates economic growth. Growth domestic product is always divided by the number of employees, thus reflects the mean income per individual in the economy (Maestas, Mullen & Powell, 2016). An improved GDP enhances the living standards of the populace.

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Growth domestic product is a measure of the economic productivity of a nation. Growth domestic product per capita refers to the GDP per person. The opulence of a nation and its economic progress is measured through the GDP per capita, and it indicates the country highlights the market value of its products, such as goods and services. An analysis of GDP per capita and its impact on population growth is the basis that this paper tries to establish.

Background Information

Policymakers examine the GDP per capita to make fiscal policy resolutions and impact economic policy activities. The GDP per capita is always used by economists to scrutinize domestic growth and to relate the economic growth of their nation to those of others. It is essential to note that a country's GDP per capita contemplates both the GDP and the population. Scholars suggest that more developed, productive, and small nations tend to have higher GDP per capita (Lange, Wodon & Carey, 2018). Examining the GDP per capita shows a country's local inhabitant's effect.

Aspects that contribute to understanding the economy of a nation and its progress with regards to its population is necessary. Scholars argue that the stable growth of GDP per capita of a society may be a consequence of technological enhancement resulting in much economic growth with the same population level. High GDP per capita does not mean a high population, which most people misinterpret as a self-sufficient economy founded on plenty of exceptional resources. Economists suggest that consistent economic progress and a population that is exponentially growing result in a negative GDP per capita growth. On the other hand, stable and advanced economies have the advantage in that their economic progress can still outperform the rate of their population growth. Besides, nations with a low degree of GDP per capita to start with, such as countries in the African continent, can experience a swiftly accumulative population with bantam GDP growth leading to a steady loss of livelihoods (Leimbach, Kriegler, Roming & Schwanitz, 2017).

As mentioned above, a study of GDP per capita encourages a comparable understanding of economic success and economic improvements worldwide. The knowledge of GDP and population are determinants in the evaluation of per capita. It, therefore, means that nations with high GDP are likely to have a high GDP per capita. Technological advancement is a contributing factor in the determination of GDP per capita since technology enhances economic development in nations. The global GDP per capita increased by an average of about 1.9 % in 2018, according to a database from the World Bank (World Bank, 2017). Advanced economies such as India and China that have a high population record GDP per capita growth rates above the universal averages due to their transformed economic policies. Most corporates, such as the International Monetary Fund (IMF), provide information on global growth with an emphasis on GDP per capita and GDP. Economists argue that technology and trade are the major contributing factors in the growth of GDP per capita.


Information on GDP per capita is crucial as it indicates a country's financial product worth per person. Data on GDP per capita is among the best measures for assessing the prosperity of people globally (Leimbach et al., 2017). It is, therefore, the basis of this paper to establish the influence of GDP per capita on people's living standards.


An analysis of the top ten countries posting the highest GDP per capita as provided by the International Monetary Fund by April of 2019 was sampled and scrutinized. Key performance indicators such as the population growth of the country, business engagements, area, and economic policies were analyzed using secondary sources of information.


From the data provided below, it is evident that countries with reasonably small populaces have a high GDP per capita. A country like Luxembourg with a population of about 600, 000 has the highest GDP per capita (World Bank, 2017). Scholars suggest that such countries with small populace engage in the exportation of energy, exportation of entrepreneurial powerhouses, and are regional financial centers. Countries such as the United States of America can sustain their GDP per capita and rank high, although it is one of the most significant nations in the world. China, on the other hand, with the largest population of about 1.4 billion people, is positioned second in the GDP list with over $ 14,220 billion and a low-ranking GDP per capita of $ 10,150 (World Bank, 2017).

There is a sluggish economic growth trend in the GDP per capita of countries all over the world, indicating that a change in the top ten list above is unlikely. Economists propose an over 3% GDP growth globally in 2019, with a slight increase by the year 2020 (World Bank, 2017). The following is a forecast of the GDP per capita growth rate.

Population and GDP per Capita

Most philosophers argued from ancient times that the limitation of resources and an increase in population would ultimately deplete the resources each person is entitled to, resulting in starvation, diseases, and war. The theorists suggested population control not considering the enhancement of the technology to increase productivity through food security, disease control, and resource management. However, family planning programs funded through international organizations ensured control in birth rates and a sustainable population growth rate (World Bank, 2017).

Population growth has influenced major economic decisions across the globe. Economists argue that rapid population growth and high birth rates can lead to a decline in economic growth. Research in the early eighteenth century found out that there was little relationship between GDP per capita income growth and national population growth rates. Researchers proposed that population growth is a neutral occurrence in regards to economic development (Maestas, Mullen & Powell, 2016). However, further research showed a negative link between GDP per capita and population growth.

Most economists suggest that the youth population dramatically influences the economic development of a country. It, therefore, follows that a decline in fertility rate creates an opportunity for a nation to improve its economic growth, a phenomenon currently referred to as a demographic dividend. Some scholars also argue that GDP per capita income growth rates are not associated with population growth rates. People act as economic agents generating money that is eventually circulated according to a ranked and fixed arrangement. Such frameworks result in a firm reply to the personal income distribution (PID) to any external interferences such as inflation and actual economic evolution. Quantity of the overall population receiving a particular ration of the entire real proceeds defines the sharing of relative income. The interrelationship of income sharing and populace offers a vibrant equilibrium and the pragmatic, sustainable individual income distribution.

Aspects such as inflation represent frameworks that recompense on pandemonium of individual income distribution that result from real economic evolution. Scholars argue that an increase in hinders development through the depletion of poor people benefits gained from the actual economic development (Maestas, Mullen & Powell, 2016). Economic frameworks also define economic growth. Empirically, the population is inversely proportional to the obtained worth of GDP per capita.

GDP per Capita Growth Rate Focus

Population age structure and personal income distribution are contributing factors in the determination of the per capita GDP of a nation. The effort made by every individual to generate income in the economically structured society highlights the personal income distribution of a country, which in turn compares the impact of per capita GDP on population. Economists propose that the force behind the success of a country's economic growth is the personal effort of each citizen to generate income.

Most economists argue that the only measure of goods and services produced by a country depends on the productivity of its populace. It, therefore, follows that the working population bracket of a nation generally indicates the upper boundary to the aggregate income that can be generated by a population and is defined by the achieved level of the gross domestic product per capita (Maestas, Mullen & Powell, 2016). It is important to register that people generate precisely a similar amount of income as they receive, which provides an equilibrium on the worldwide earnings and production. Scholars suggest that it is not an easy task to increase revenue while at the same time enhancing living standards since such a move is likely to impact negatively on the economic competitiveness of a country. GDP per capita growth rate is predominantly determined by the present circulation of personal proceeds, which depends on the population age distribution. The working population is the pillars of a country's economy.


Recent studies have indicated that the relationship between economic growth and population growth is divisive. Countries having high economies are likely to experience socio-economic problems if they have low population growth rates. In contrast, countries experiencing little economic development and have a high population growth rate may struggle with their economic agendas. Some scholars suggest that international migration can help solve such inequity, an idea that is opposed by many countries (Lange, Wodon & Carey, 2018). Besides, some scholars argue that an increase in population has the potential of depleting the limited resources on earth, and substantially plummeting constant prospective growth.

Population growth impacts many aspects like the age structure, which determines a country's workforce. Population growth also determines economic imbalance and international migration. Studies suggest that the dwindling population growth in most countries across the globe may result in the world population reducing to less than 1% per annum, more so if the demographic evolution is concluded in Sub-Saharan Africa and other nations of vigorous population growth (World Bank, 2017). It noticeable that economic growth is vital for improving people's welfare across the globe, and the role of population growth in the advancement of livelihoods is a crucial policy matter. In addition to the impact of population and GDP per capita, it is essential to specify that the impact on international issues such as migration and the utilization of global resources (Maestas, Mullen & Powell, 2016).

Economists argue that if GDP per capita and population growth were not linked, then a higher population growth rate generates a higher economic development growth. Population growth has a direct influence on the GDP per capita of a nation. Such significance on the financial endowment of country results from population change has both positive and negative economic development, which relies on the nature of its influence on the GDP per capita.

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