Would a larger population increase long-run incomes

The relationship between the human population size and per capita incomes has long been debated. Two competing forces feature prominently in these discussions. On the one hand, a larger population means that limited natural resources must be shared among more people. On the other hand, a larger population means more innovation and faster technological progress, other things equal. We study a flexible model that features both of these channels. This model delivers a sufficient statistic for the sign of the effect running from population to per capita income that depends on (i) the share of global income accruing to natural resource owners and (ii) the elasticity of TFP growth with respect to research inputs. Available evidence on these key parameters—most importantly, the small share of income that is paid to natural resource owners—suggests that, in the long run, (marginal) increases in population would likely lead to (marginal) increases in per capita incomes. (Copyright: Elsevier)