This paper develops a theory of fertility choice with loss aversion over consumption. Because children compete with consumption for household resources, loss-averse households cut fertility aggressively to protect living standards when adverse shocks push consumption below reference levels, but respond modestly to positive shocks. Cross-country panel data and quasi-experimental evidence support the model's predictions. A calibrated version attributes a substantial share of China's recent fertility decline to slowing income growth activating loss aversion. The findings suggest that pro-natalist policies are more effective during downturns, temporary subsidies may backfire upon withdrawal, and pro-fertility regimes should target higher fertility under income uncertainty.