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Economic change, impacts and population theories

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When industries grow or shrink, whole regions feel the effects. Economists have also argued for centuries about whether the world can feed itself.

Decline in a developed country: the UK

From the 1960s onwards, UK coal mining, steelmaking and shipbuilding declined because of cheaper imports and mechanisation.
Negative impacts: unemployment, derelict land, and a negative multiplier: lost wages mean less spending, so shops and services close too.
Positive changes: growth of services, finance, tourism and high-tech industries; regeneration of old industrial areas.

Growth in an emerging country: China

Manufacturing in China grew very rapidly from the 1980s.
Positive impacts: hundreds of millions of jobs, rising incomes and a growing middle class.
Negative impacts: severe air and water pollution, long working hours, and inequality between coastal cities and rural areas.

Malthus and Boserup

Thomas Malthus (1798): population grows faster than food supply, so eventually there will be shortages, ended by 'checks' such as famine, disease or war. A pessimistic view.
Ester Boserup (1965): population growth pushes people to invent new ways of producing more food, such as irrigation, fertilisers and new crops. 'Necessity is the mother of invention.' An optimistic view.
The Green Revolution, which greatly increased crop yields from the 1960s, is often used to support Boserup.
Worked example

Explain what is meant by the negative multiplier effect.

  1. A large employer, such as a factory, closes.
  2. Workers lose their wages and spend less in local shops and services.
  3. These businesses lose income, so they cut jobs or close, and the area declines further.

Answer: One closure leads to a downward spiral of job losses and decline.

Key idea

UK industrial decline caused unemployment, derelict land and a negative multiplier, but services grew. China's manufacturing growth created jobs and wealth but also pollution and inequality. Malthus (1798): population outruns food. Boserup (1965): population pressure drives innovation.

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