Abstract: The last five decades witnessed a remarkable reversal where many countries around the world shifted from suppressing to maintaining or promoting childbirth. This paper utilizes historical data from this episode to provide systematic evidence suggesting that the effectiveness of pro-fertility policies is smaller than the anti-fertility ones, weighing against standard models with smooth fertility demand. To explain this fact, we develop a behavioral theory of fertility choice featuring a simple intuition: due to the trade-off between fertility and consumption, households with loss aversion over the current living standard are more reluctant to increase fertility than to reduce it upon symmetric changes in the shadow price of children. Lastly, we embed asymmetric fertility elasticities into a dynamic model where the social planner minimizes the costs associated with fertility that is either too high or too low. We show that with asymmetric elasticities, fertility levels possess positional values that should be taken into account in policy evaluations.

Abstract: We present new empirical evidence that a rigid trade and taxation regime, combined with a global decline in silver production—triggered by the Spanish American wars of independence—contributed to social instability in 19th-century Qing China. Using newly assembled county-level panel data on conflict and economic conditions, along with spatial data on key commercial routes reconstructed from a Qing-era travel guide, we show that counties located farther from Canton—the empire’s sole legal international port—were significantly more prone to conflict during periods of post-war silver appreciation. We argue that silver-denominated taxation played a central role in this relationship by reducing local welfare, thereby increasing the incidence of conflict, and we provide empirical evidence supporting this mechanism. Quantitatively, the global silver shock lowered aggregate individual welfare and raised the risk of unrest, with our estimates suggesting that the taxation channel accounts for the majority of the effect, while the standard trade channel played only a minimal role. A counterfactual analysis indicates that had the Qing government opened additional international ports, the negative impacts would have been more geographically dispersed and politically less destabilizing.