What kind of changes would be expected in the demand of a country that has a growing population?

When people move away from villages, jobs, schools, shops and other facilities also disappear. The government needs to tackle the causes and effects of population decline, for instance by cutting down on the number of new homes being built.

Causes of population decline

The size and demographics of the population change when:

• fewer children are born;
• families with children move to larger towns and cities;
• young and better-educated people move to larger towns and cities.

Current and projected population decline

The areas with the highest rates of population decline are Zeeland Flanders, southern Limburg and northern and eastern Groningen. Here, the population is projected to fall by 16% by 2040.

In certain other parts of the country, population decline is anticipated but has not yet actually started. In these areas, the population is projected to fall by 4% by 2040.

In the rest of the Netherlands, population growth of 11% is forecast over the same period.

Effects of population decline

When young people move to bigger towns and cities, the average age of the population in the place they leave behind automatically goes up. A community with a higher proportion of older inhabitants may be less attractive to businesses, which may additionally have difficulty finding suitable staff locally. Other effects of population decline include:

• fewer schools, due to there being fewer children;
• a drop in house prices because more homes are unoccupied;
• fewer new homes being built;
• less demand for rented accommodation;
• fewer care facilities;
• less turnover for shopkeepers and businesses;
• fewer sports facilities;
• fewer people going to the theatre, cinema or concerts, so these facilities are eventually cut back;
• fewer people travelling by public transport, which thus costlier to run;
• local residents have to travel further to reach the facilities they want.

Provincial and municipal responsibility

The government wants to maintain the liveability of areas where the population is shrinking or where decline is forecast. The provincial and municipal authorities hold primary responsibility for tackling the consequences of population decline and demographic ageing. Their efforts are supported by central government. But the authorities cannot tackle the problem alone. They need to work together with housing associations, care institutions, active members of the community and businesses.

Living with population decline

By working together, local stakeholders and the authorities can develop ways to deal with the effects of population decline. For instance, schools can merge because there are fewer pupils to teach. Sports clubs can share facilities. Local authorities can make agreements with retailers’ associations about concentrating shops in certain areas.

In areas with the highest rates of decline, the proportion of elderly people is higher than elsewhere, increasing pressure on local care services. The challenge is to enable older people to live at home for as long as possible, and to identify what provisions they need in order to do so.

Local authorities can also strive to improve accessibility, for instance by setting up a local minibus service.

Areas of current and projected population decline

The illustration shows areas of current (pink) and projected (orange) population decline.

Enlarge image

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• PMID: 12291968

Impact of population size on market demand under a market economy

Y Li. Chin J Popul Sci. 1996.

Abstract

PIP: This article presents an analysis of the relationship between population size and market demand in China. It is argued that a smaller elasticity of a product is related to a greater impact of the size of population on the consumption of such a product. Greater elasticity reduces the impact of population. The impact of population is also mediated by average salary and salary structure. Salary structure affects prices, and prices affect supply and demand, which affect consumption. In a market-oriented economic system, the impact of population size on market demand affects supply and demand and prices. Current market demand reflects the effect of supply and demand in previous periods. Current population size will affect future market demand through prices and supply elasticity. Population changes are slow, and consumption changes are slow. The slowness of the process of change means there is time to adjust production and distribution in order to achieve stability in market supply. Control of price increases and inflation will promote economic growth, social stability, and improvement in China's socialist market economic system. It is argued that the supply of bicycles is elastic. Despite increased investment, labor, and fixed assets, profits will not grow. However the entertainment industry, as well as education, public welfare, urban utilities, noncommercialized housing, and telephones are less elastic. A large consumer population and a smaller supply elasticity result in high costs of installation, which are made higher by the state monopoly. It is argued that in China it is necessary to regulate certain necessities with less market elasticity in order to be consistent with optimum allocation of resources.

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MeSH terms

What happens to demand when population increases?

How does population influence changes in demand example?

What happens to our supply and demand curves when expected future prices are projected to increase in the market?

How would you expect an increase in the price of a good to affect its demand curve?