Cambridge International as and a level Economics Ebook

Dependency ratio: 
the proportion of the economically 
inactive to the labour force.
KEY TERM
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Cambridge International A Level Economics

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TOP TIP
Be careful not to confuse population growth and 
population size. Developing economies tend to have high 
population growth but not necessarily high population 
size. For instance, Zimbabwe has a population growth 
rate of 2.15% but a population of only 12.7 million 
whereas the US has a lower population growth of 0.85% 
but a higher population size of 320 million.
Classification according to income 
distribution
It is a characteristic of some developing countries that 
income is unevenly distributed. Th
is is partly because 
income-generating assets, especially land, are owned 
by the few. As a result, there are great extremes of rich 
and poor. Income is particularly unevenly distributed in 
Latin America and in South Africa and Lesotho. Income 
is relatively evenly distributed in Scandinavian European 
economies.
Th
e transition of Eastern European countries, 
including Poland and Russia, from centrally planned to 
market economies has increased inequality as a small 
number of people have benefi ted enormously from the 
new opportunities that have been forthcoming. Two 
exceptions are Slovenia and the Czech Republic, which 
have two of the least uneven distributions of national 
income in Europe.
SELF-ASSESSMENT TASK 
9.11
China’s one-child policy
China has been relaxing its one-child policy. The policy 
came into force in the late 1970s and has been claimed 
to have prevented the births of 400 million extra people 
and saved China from food shortages. The number of 
exceptions to the policy has been increasing with, for 
instance, urban couples being allowed to have two 
children if both parents are only children and rural 
couples are permitted to have a second child if the first 
child is a girl.
One reason behind the relaxation is concern about 
China’s ageing population. Longer life expectancy is 
increasing the proportion of elderly citizens and for the 
first time in decades the size of the country’s working-
age population is decreasing.
Some economists, however, have claimed that the 
relaxation of the policy will have little impact as rising 
incomes tend to reduce the birth rate anyway.
Table 9.6
compares population growth in China 
and India.
Read the feature below and then answer the questions that follow.