Cambridge IGCSE Economics: Population and differences in development between countries (0455)

This guide is written for the Cambridge IGCSE Economics 0455 syllabus for examination in 2026. It covers sections 5.3 (Population) and 5.4 (Differences in economic development between countries). The course is not tiered. The syllabus says you must be able to interpret a population pyramid, but you do not have to draw one. Every country, firm and number below is invented for teaching. Nothing here is a real statistic.

Related pages: the revision notes, the practice questions, the Cambridge IGCSE Economics hub, the printable checklist and the free diagnostics.

What this unit covers

Section	What you must be able to do
5.3.1	Explain the factors affecting population growth: birth rate, death rate, net migration, immigration, emigration
5.3.2	Explain how and why these rates vary between countries
5.3.3	Explain the concept of an optimum population; analyse the effects of rising or falling population size and of changes in age and gender distribution; interpret a population pyramid
5.4.1	Explain causes and impacts of differences between countries in income, productivity, population growth, the size of the primary, secondary and tertiary sectors, saving and investment, education and healthcare

5.3.1 Factors affecting population growth

Population changes for two reasons.

• Natural change = births − deaths. Birth rate and death rate are written per 1,000 people per year.
• Net migration = immigration − emigration. Immigration is people arriving to live in the country. Emigration is people leaving.

Total change = natural change + net migration. Convert to a percentage by dividing by the opening population.

Worked example 1: a growing population (Country A, illustrative)

Opening population 20,000,000. Births 560,000. Deaths 180,000. Immigration 40,000. Emigration 120,000.

Birth rate     = 560,000 / 20,000,000 x 1,000 = 28 per 1,000
Death rate     = 180,000 / 20,000,000 x 1,000 = 9 per 1,000
Natural change = 560,000 - 180,000 = +380,000   (19 per 1,000, or 1.9%)
Net migration  = 40,000 - 120,000 = -80,000     (-4 per 1,000)
Total change   = 380,000 - 80,000 = +300,000    (1.5%)
Closing population = 20,300,000

Net migration is negative, so migration slowed growth. It did not stop it, because natural change was large.

Worked example 2: a shrinking natural population (Country B, illustrative)

Opening population 10,000,000. Births 80,000. Deaths 110,000. Immigration 60,000. Emigration 10,000.

Birth rate 8 per 1,000; death rate 11 per 1,000
Natural change = 80,000 - 110,000 = -30,000   (-0.3%)
Net migration  = 60,000 - 10,000  = +50,000
Total change   = -30,000 + 50,000 = +20,000   (+0.2%)
Closing population = 10,020,000

Here the population only grows because of immigration.

What pushes each factor

• Birth rate rises when families are large for economic reasons (children work on farms or support parents in old age), when child deaths are common, when contraception is hard to get, when women have little education or paid work, and when cultural or religious views favour large families. Government payments for each child can also raise it.
• Birth rate falls when incomes rise, women stay in education and work, raising children becomes expensive, and families can rely on pensions rather than children.
• Death rate falls with better healthcare, clean water, sanitation, food supply and vaccination. It rises with famine, epidemics, war and natural disasters.
• Migration responds to push factors (low wages, unemployment, conflict) and pull factors (higher wages, jobs, safety, family already abroad). Government rules on entry can limit it.

5.3.2 Why rates differ between countries

Countries at different income levels tend to show different patterns. Treat these as tendencies, not rules.

Rate	Often higher in	Reasons
Birth rate	Lower-income countries	Children are a source of labour and security; limited contraception; lower female education; higher child death rates
Death rate	Lower-income countries, but also some ageing high-income countries	Weak healthcare and sanitation in the first; a large share of elderly people in the second
Net migration (positive)	Higher-income, faster-growing countries	Jobs, wages and stability attract workers
Net migration (negative)	Countries with conflict or low wages	Skilled workers may leave for better pay

A key point: death rate is affected by age structure. A country with excellent healthcare but many elderly people can have a higher death rate than a poorer country with a very young population. Always say this when asked why a rich country has a higher death rate.

As a country develops, the death rate usually falls first because healthcare and food improve. The birth rate falls later. In between, population growth is fast. Later both rates are low and growth slows.

5.3.3 Effects of changes in population

Optimum population

The optimum population is the population size that gives the highest output per head, given the country’s resources, technology and capital. Fewer people than this is under-population: resources are not fully used. More is over-population: extra workers add less than the average, so output per head falls.

Worked example 3: finding the optimum (Country E, illustrative)

Population (millions)	Total output (units, billions)	Output per head
10	100	10
20	260	13
30	450	15
40	560	14
50	600	12

Output per head = total output ÷ population. It peaks at 15 when the population is 30 million, so that is the optimum. At 50 million Country E is over-populated; at 10 million it is under-populated.

The optimum is not fixed. New technology, more capital or better skills raise output per worker, so the optimum moves upward. A loss of farmland or a fall in resources moves it down.

Increasing population size

• Possible gains: a larger labour force, a bigger market for firms, more taxpayers, a wider range of skills.
• Possible costs: more pressure on land, water and housing, congestion, higher unemployment if jobs are not created, more spending needed on schools and hospitals, and lower output per head if the country is already beyond its optimum.

Decreasing population size

• Possible gains: less pressure on resources and the environment, and possibly higher output per head if the country was over-populated.
• Possible costs: labour shortages, fewer taxpayers, falling demand for housing and goods, closure of schools, and fewer young entrepreneurs.

Age distribution and reading a population pyramid

A population pyramid shows the share of males and females in each age group. Males are on one side, females on the other. Read it in three steps: the width of the base, the width of the middle, and the width of the top.

Country C (young)          Country D (ageing)
65+      #                  65+    ########
15-64    ######             15-64  ##########
0-14     ########           0-14   ###
(wide base, narrow top)     (narrow base, wide top)

Worked example 4: young and ageing pyramids (illustrative)

Group	Country C males %	Country C females %	Country D males %	Country D females %
0-14	18	18	6	7
15-64	29	29	29	30
65+	3	3	12	16

Totals: Country C has 36% aged 0-14, 58% aged 15-64 and 6% aged 65+. Country D has 13%, 59% and 28%.

One simple measure is the dependency ratio. It is (aged 0-14 + aged 65+) ÷ aged 15-64 × 100. The syllabus does not name it, but it is a tidy way to compare burdens.

Country C: (36 + 6) / 58 x 100 = 72.4
Country D: (13 + 28) / 59 x 100 = 69.5

The ratios are similar but the burdens differ. Country C must pay for many schools and will need many jobs in 15 years. Country D must pay for pensions and long-term healthcare, and its workforce is not being replaced.

Young population: high spending on education and child health; a future large workforce (possible demographic gain if jobs exist); risk of youth unemployment.

Ageing population: rising pension and healthcare costs; fewer taxpayers per pensioner, so higher taxes or borrowing; labour shortages; possible rise in the retirement age; more demand for care services; possible use of immigration to fill jobs.

Gender distribution

Look at whether one sex is far larger in a working-age band. In Country D the 65+ band is 12% male and 16% female: women live longer, so more elderly women need care and may have lower pension savings. Large gaps in working ages can come from migration of workers (often men moving for jobs) or from differences in death rates between the sexes. A gender imbalance can change the labour supply, family formation and the birth rate. Do not confuse the number of women in the population with how many take paid work: pyramids show headcount, not participation.

5.4.1 Differences in economic development between countries

Use the pattern cause then impact for each of the seven factors. Here is a comparison of two invented countries.

Indicator (illustrative)	Country X	Country Y
Real GDP per head	2,400	30,000
Output per worker	6,000	60,000
Share of workers in primary / secondary / tertiary	62% / 12% / 26%	3% / 20% / 77%
Saving as % of income	6%	22%
Population growth	2.8%	0.3%
Life expectancy (years)	58	81
Adult literacy	64%	99%

Income

Real GDP per head: Country X 14.4 billion ÷ 6 million people = 2,400. Country Y 360 billion ÷ 12 million = 30,000. Y’s income is 12.5 times X’s. Low income means low spending on food, health, education and housing, so living standards are poorer and saving is hard.

Productivity

Output per worker = output ÷ workers. X: 14.4 billion ÷ 2.4 million = 6,000. Y: 360 billion ÷ 6 million = 60,000, ten times higher. Causes of low productivity: little capital, simple technology, poor skills, poor health. The impact is low wages and low income, which feeds back into low saving and investment.

Population growth

Per-head growth = (1 + GDP growth) ÷ (1 + population growth) − 1.

Country X: 1.034 / 1.028 - 1 = 0.58% a year
Country Y: 1.021 / 1.003 - 1 = 1.79% a year
Extra income per head: X about 14 a year; Y about 538 a year

X’s GDP grows faster than Y’s, yet income per head barely moves because population grows almost as fast. The absolute gap widens. A fast-growing, young population also needs more schools and food.

Size of the primary, secondary and tertiary sectors

Primary = extraction and farming; secondary = manufacturing and construction; tertiary = services. Low-income countries often have most workers in the primary sector, where output per worker is low and prices of raw materials can swing sharply. Higher-income countries have large tertiary sectors and higher-value production. Shifting workers from farming to factories and services raises productivity and income.

Saving and investment

Saving in X: 6% of 14.4 billion = 864 million, or 144 per head. Saving in Y: 22% of 360 billion = 79.2 billion, or 6,600 per head. Saving funds investment in capital. Low saving means little investment, low productivity and low income, which keeps saving low again.

Education and healthcare

Education raises skills and productivity and lets people use new technology. Healthcare raises life expectancy, reduces days lost to illness and lets people work longer. A country that cannot afford either stays poor, so it cannot afford them: a cycle of low income.

Evaluation chain

1. Low income limits saving and spending on schools and clinics.
2. Fewer skills and poorer health mean low productivity.
3. Low productivity keeps income low.

To break the cycle, a country needs investment, education, healthcare or lower population growth. Which matters most depends on the country. Averages hide inequality, and a high GDP per head does not always mean widely shared benefits.

Common errors

• Writing “birth rate” when you mean “number of births”: rates are per 1,000.
• Forgetting net migration when finding total change.
• Saying a rich country’s death rate must be lower. Age structure matters.
• Saying a larger population is always better or always worse. Compare with resources and capital.
• Calling the optimum the largest population. It is the one with the highest output per head.
• Listing causes of development gaps without the impact.

Official syllabus

Cambridge IGCSE Economics 0455 syllabus for examination in 2026, published by Cambridge International, sections 5.3 and 5.4.