The relationship between population size, the quality of human capital, and the quality of life, interests social scientists. This topic is particularly important in China, where a previous ‘demographic gift’ is becoming a ‘demographic debt’ due to fertility below the replacement rate, and an aging society that places pressure on the social welfare system for elderly and young children. In this thesis, impacts of family size on aspects of the quality of life, such as the nutrient intakes of children and health outcomes of elderly are studied. The response of the working-age population in supporting the two groups through the channel of fertility is also studied. Multiple waves of data from the China Health and Nutrition Survey are used as the major data source. The thesis uses changes in local regulations of family planning policy over time and space as a source of exogenous variation in family size to assist in identifying the causal effect of family size on the selected outcomes. Panel analysis is also applied to deal with the unobservable factors at individual level. For children, a quantity-quality trade-off is apparent when quality of children is measure by the nutrient intakes. The trade-off would be less apparent if exogenous sources of variation in family size were ignored. For the elderly, their health appears to be adversely affected by the number of grandchildren, especially for grandmothers and especially in urban areas. Decomposition analysis for the urban-rural fertility gap finds that the fertility gap between women living in rural and urban area is mostly caused by their different characteristics, whereas the fertility gap between urban and rural hukou holders is more of an inherent thing that lowers the fertility of women with urban hukou. This finding suggests the possible policy trade-off between encouraging urbanisation and encouraging higher fertility may not be as strong as they initially appear.