https://pdf.usaid.gov/pdf_docs/PCAAB500.pdf

Moderation of population growth offers benefits in terms of resources saved for
investment and/or higher per capita consumption. If resource requirements to support fewer
children are reduced and the funds now allocated for construction of schools, houses, hospitals
and other essential facilities are invested in productive activities, the impact on the growth of
GNP and per capita income may be significant. In addition, economic and social progress
resulting from population control will further contribute to the decline in fertility rates. The
relationship is reciprocal, and can take the form of either a vicious or a virtuous circle.

This raises the question of how much more efficient expenditures for population control
might be than in raising production through direct investments in additional irrigation and power
projects and factories. While most economists today do not agree with the assumptions that went
into early overly optimistic estimates of returns to population expenditures, there is general
agreement that up to the point when cost per acceptor rises rapidly, family planning expenditures
are generally considered the best investment a country can make in its own future.
II Impact of Population Growth on Economic Development
In most, if not all, developing countries high fertility rates impose substantial economic
costs and restrain economic growth. The main adverse macroeconomic effects may be analyzed
in three general categories: (1) the saving effect, (2) “child quality” versus “child quantity”, and
(3) “capital deepening” versus “capital widening.” These three categories are not mutually
exclusive, but they highlight different familial and social perspectives. In addition, there are often
longer-run adverse effects on agricultural output and the balance of payments.
(1) The saving effect. A high fertility economy has perforce a larger “burden of
dependency” than a low fertility economy, because a larger proportion of the population consists
of children too young to work. There are more non-working people to feed, house and rear, and
there is a smaller surplus above minimum consumption available for savings and investment. It
follows that a lower fertility rate can free resources from consumption; if saved and invested,
these resources could contribute to economic growth. (There is much controversy on this;
empirical studies of the savings effect have produced varying results.)
(2) Child quality versus quantity. Parents make investment decisions, in a sense, about
their children. Healthier and better-educated children tend to be economically more productive,
both as children and later as adults. In addition to the more-or-less conscious trade- offs parents
can make about more education and better health per child, there are certain biologic adverse
effects suffered by high birth order children such as higher mortality and limited brain growth
due to higher incidence of malnutrition. It must be emphasized, however, that discussion of
trade-offs between child quality and child quantity will probably remain academic with regard to
countries where child mortality remains high. When parents cannot expect most children to
survive to old age, they probably will continue to “over-compensate”, using high fertility as a
form of hedge to insure that they will have some living offspring able to support the parents in
the distant future.