“We are doing this for your own good”
“Beta, It’s better for you”
~ Average Indian parent in
disagreement with their child
By: Parisa Chatrath; Edited by: Shagun Khetan
A childhood constitutes hearing dialogues like this from parents and caregivers yet never understanding why such remarks are proclaimed in the first place.
After a summer of living in the (intense) proximity of your parents, the people who gave you your life’s blood, did you ever wonder how you were raised? What kind of strategic decision-making was at play when your parents decided which neighborhood you grew up in, who constituted your world, and more?
This article delves into the economics behind parental advisory, it brings to light the choice of parenting style adopted by parents based on the economic conditions that surround them, its effect on skill development & cognition for the child (you), and the subsequent tradeoffs. This piece aims not only to expand your economic outlook on caregiving activities like parenting but simultaneously to point at the endless endogeneity that influences parenting choices.
The Economic Model Of Parenting:
It is astonishing to note how economic modeling can quantify the intricacies of parenting by noting the constraints of parents, preferences, and model results to make production functions.
A production function of the child’s cognitive and non-cognitive skills (like empathy, patience, etc.) is created from parental inputs of time, budget (spending on the child), and technology provided (access to digital media in moderation helps improve literacy). This function develops as parental inputs and external endowments such as the effects of peers from school, vary.
“It is for your own good. We want what is right for you. ”
~ Average Indian parent in
disagreement with their offspring
Each child has wondered if the decision in question was, in fact, good for them or not.
To understand the trend of parents trying to replicate their values and decision-making rationale in their offspring, it is imperative to understand the links between their utility functions and their child’s. The utility functions of parents and children are interlinked as the preferences cultivated by each group are generally correlated to the other.
Each individual derives utility from their decision-making in the present and values the utility they will derive in the future, introducing the concept of two-period intertemporal utility. As the name suggests, the action of deriving utility from consumption decisions made across two periods is known as two-period intertemporal utility.
Following the two-period model, the economic literature on parenting dictates that parents derive utility from children in two periods i.e. the periods pre- & post-adulthood.
The utility derived is rooted in the total lifetime utility of the child (for example, well-being & holistic development of the child across a lifetime). Additionally, parents tend to derive utility from the actions and decisions of their children that reflect values of their own. This preference is known as paternalism. Such a paternalistic preference varies in intensity across parenting styles, differentiating one from the other. The utility rooted in the total lifetime utility of children is born out of the parent’s altruistic preferences and indicated by the more commonly used phrase by parents:
‘Your happiness is our happiness’
Understanding the preferences of parents is essential, yet the next naturally occurring question is: What parenting style does my parent exhibit? Is it different from the so-called ‘normal’ parenting style one wishes their parent would adopt?
Differences in parenting styles are identified by the focus & weight parents deploy on their altruistic and paternalistic preferences.
‘‘Why don’t you just listen to me for once?
I KNOW WHAT I’M TALKING ABOUT!”
~Average Indian Kid when told what’s good for them
Disagreements are central to the economics of parenting as they help differentiate parenting styles. The manner in which disagreements are resolved and the degree of mediation done by parents helps differentiate the parenting styles adopted in each case under observation. Disagreements can range from views on risk aversion, work ethic, long-term success, and more.
Traditionally, there are 3 pre-dominantly detected parenting styles in developmental psychology i.e. permissive, authoritarian, and authoritative parenting styles.
This article limits its scope of analysis to these three dominantly detected parenting styles, excluded styles consist of neglectful and dismissive parenting.
The permissive parenting style places additional weight on altruistic preferences than paternalistic options. The permissive parent does not interfere with the child’s preferences and does not limit her choice set, yet works to expand it in the child's accord. On the opposite end of the spectrum lie the authoritarian and authoritative parents who prefer to fulfill their paternalistic preferences. The authoritarian parent imposes her preferences on the child’s choices through coercion and controlling the limits of the child’s choice set.
The authoritative parent will not pursue measures of coercion yet will mold the child’s preferences through persuasion and inculcating values that reflect her own in the first period (childhood) of the two-period model. Such a child will reflect adult-like preferences early on due to care under such a parenting style.
It cannot be said that any of the styles under analysis are optimal choices as each is coupled with tradeoffs of its own. The permissive parent emphasizes altruistic preferences over paternalistic ones, resulting in the child making decisions that serve instant gratification rather than long-term success. Such a child may show perfect impatience and may not practice consumption smoothing across both periods. The authoritarian parent may raise a child with a stunted skill of independent decision-making as each choice of the child is influenced by the parent. The authoritative parent also influences the child’s decision making yet such a parenting style is costly. In contrast to an authoritarian parent, influence is not instilled by the fear of corporal punishment and expectation of obedience. The authoritative style is costly as it requires higher inputs of time and emotional support from the parent’s end as influence is established by logical connection and consequence.
This style may reduce the child’s welfare as she only makes forward-looking adult-like decisions.
How do economic conditions affect the choice of parenting style at play?
In several industrialized countries, the trend of growing income inequality has been shown to be correlated with the choice of parenting styles adopted by parents.
As income inequality rises, a trend of adopting ‘intensive’ parenting styles such as authoritarian and authoritative choices are preferred and permissive styles are declined.
The widely known trend of ‘helicopter parenting’ was adopted, and the uptake of such intrusive and paternalistic methods of parenting was prevalent.
A World Value Survey across OECD countries noted the same as it bifurcated intensive parents from relaxed ones by requesting people to select five values from a list of ten, that they deem necessary for the development of children at home.
Parents who chose values like obedience and hard work were expected to choose intensive styles while those who selected values like imagination and independence were detected to be relaxed. From the survey, 63% of respondents were classified to be intensive parents.
These trends can now be related to macroeconomic conditions by observing conditions such as pre-tax income inequality, returns & growing importance of tertiary education, and redistribution measures such as tax progression and social expenditure in relation to parenting styles.
(The figure above establishes trends between the selection of parenting styles and metrics like inequality and redistribution across countries.)
(Source: World Value Survey)
As mentioned above, a positive correlation between pre-tax inequality and the adoption of intensive methods is detected against relaxed options. A tendency to value tertiary education causes the same effect as childcare time increases.
Redistributive policies such as tax progression and increase in social expenditure point to a negative correlation to adopting intensive parenting styles. Countries with a focus on tax-progressive policies and increasing social expenditure face parents that are permissive and relaxed parents such as in the case of Sweden where 74% of parents were detected to be relaxed.
Observing the condition of the United States, the story in the fitted line given above is confirmed. As the USA has a prevalent problem of income inequality and lower tax progression policies, parents prefer to adopt more involved and intensive parenting styles.
With a movement towards greater importance to tertiary education, American parents increase childcare time by adopting authoritative and authoritarian parenting styles.
79% of American parents were detected to be intensive of which 49% were classified as authoritative and 30% as authoritarian.
But what about India?
You would expect Indian parenting to be the prime picture of intensive and intrusive parenting. Yet, it's important to confirm if the facts reflect the same.
Reviewing the current tax structure introduced by Nirmala Sitharaman in her FY25 budget shows an exemplary tax progressive system. There is also a mild drop in social expenditure in FY2024-25 from last year detected.
It is imperative to note the substantial pre-tax income inequality as the country’s wealthiest 20% accumulate 92% of the total country savings.
While redistributive policies are at play, they cannot overpower the significant inequality in existence, indicating the dominant adoption of authoritarian and authoritative parenting styles in India.
Studies comparing Indian parents with Australian parents detected Indian parents to be more demanding and harsh. A similar study compared the parenting approaches of Indian mothers in the US and mothers in India and found them to be more authoritarian and preferred to fulfill paternalistic preferences through corporal punishment. Such findings are further substantiated by the reviews of Indian and European adolescents on parenting received. Indian participants reported receiving authoritarian parenting in contrast to the authoritative parenting measures European participants witnessed.
After recognizing these findings and the effect of macroeconomic conditioning on parenting, hopefully, you’ve grown more forgiving and understanding of your parent's choices.
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