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 provide new evidence that rigid trade and taxation systems, together with a global decline in silver production following the Spanish American wars of independence, fueled rising silver prices and subsequent social instability in early nineteenth-century Qing China. Drawing on newly assembled county-level panel data and historical commercial routes, we show that regions farther from Canton—the empire’s sole legal international port—faced sharper silver price increases and higher conflict incidence after the silver shock. We argue that silver taxation was central to this relationship: because taxes were fixed in silver, price increases raised the real tax burden and heightened the risk of unrest. Quantitative estimates indicate that the global silver shock lowered China’s aggregate welfare by 1.1%, with taxation accounting for most of the loss. Counterfactual analysis suggests that opening additional international ports would have made the negative impacts more uneven across regions and hence more politically destabilizing, though the effect was limited. By contrast, fiscal reform emerges as a more critical policy lever for mitigating the adverse consequences of the silver shock.