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CHAPTER 1

The Economics of Parenting Style

What does it actually mean to use economics to understand what parents do? It is a fair question to ask: until a few decades ago, it did not occur to anyone that economists may have useful things to say about parenting. Much of traditional economics deals with money and profit, and, more generally, activity taking place in firms and in the marketplace. In contrast, raising children takes place in the home, and while money is involved, parenting is above all about love and affection.

That an "economics of parenting" is possible today is in large part due to the pioneering work of the Nobel laureate Gary Becker, who was one of Matthias's thesis advisors at the University of Chicago. According to Becker, economics is a general tool used to analyze human behavior that need not be limited to a narrow range of traditional subjects. In his work, Becker extended the realm of economics to cover social phenomena such as crime, politics, religion, and the family. By the time we were in graduate school, Becker's ideas had entered the mainstream, and his work had a profound impact on us. In much of our own research, we have followed Becker's example by using economics to understand issues that were traditionally covered by other fields such as sociology or political science.

The essence of the economic approach to human behavior is that it conceives of people as doing the best they can to achieve their objectives, subject to the constraints that the environment imposes on them. For instance, when we think of the decisions of firms, we envision managers whose objective is to maximize firm profit through actions such as hiring workers, investing in machines, or developing new products, subject to constraints that derive from the firm's production technology, the skills of the employees, the prices of inputs, and the demand for the firm's products.

In this book, we want to examine the decisions people make as parents along the same lines. To do this, just as in the example of a firm above, we need to start with parents' objectives and constraints. What is it that parents are trying to accomplish, and what are the constraints that place limits on what they can do?

PARENTS' OBJECTIVES AND CONSTRAINTS

Let's start with parents' objectives. In everyday speech, the adjective "economic" is often used to mean "monetary" or "financial," and in certain situations, it makes sense to think of parents as pursuing monetary goals using children as their economic resources. In some societies, young children are a source of income for families. Child labor is a widespread phenomenon in many developing countries today and was equally common in today's industrialized countries in the past (we discuss the specific issue of child labor in chapter 7). Likewise, in some societies parents may decide to have children in the expectation that they will support them in old age. Either as workers or as caregivers, one can regard children, in part, as economic assets in which parents can invest.

Yet envisioning parents as having children mainly for financial reasons is a caricature that misses the main picture. Financial matters may play some role, but for most parents, child-rearing is first of all about compassion, empathy, and love. Parents' concern for their children includes both the present (parents would like their children to be happy) and the future (parents would like them to do well in life).

If parents' objectives are for children to be happy and to do well in life, what are the constraints that they need to take into account? When we speak of constraints, we mean all limitations or restrictions that people are subject to when making choices. In traditional economics, the most familiar constraint is the budget constraint: people would love to buy many things (a bigger house, a nice car, an expensive vacation) but are restricted by what they can afford.

In terms of parenting, limited funds may restrict parents' ability, for example, to pay for the best private schools or to satisfy their children's demands for the latest gaming console. Yet constraints, like objectives, need not be exclusively of a financial nature. For many parents, the most significant constraints are time and capabilities. Some parents need to work long hours, cutting down the time they can spend with their children. In some instances, time constraints can be extreme: some parents are locked in jail, and others migrate without their families in pursuit of work, enduring separation from their children for years. Limits to parents' knowledge and abilities are equally important. Some parents may have the time and resources to care for their children, but fail to provide them with an appropriate diet because they are unaware of the nutritional properties of different types of food. Others underestimate the importance of education as a means of getting on in society and do not put effort into motivating their children to do well in school. In emphasizing the different constraints and opportunities that people (especially, the rich and the poor) face, our thinking is heavily influenced by the work of the British economist Tony Atkinson, who was one of Fabrizio's mentors at the London School of Economics. His lifelong research on inequality and poverty would have made him a likely Nobel laureate had he lived longer.

That parents face certain constraints is an undeniable fact of life, and even saying that they have objectives should not be controversial. The point where we economists depart from other social sciences is that we take the perspective that, by and large, people act deliberately to achieve their objectives. Commenting on Becker's work on fertility choice, the American economist James Duesenberry wrote, "Economics is all about how people make choices; sociology is all about how people don't have any choices to make."

In the end, whether or not our choice-based method is fruitful hinges on its ability to explain social phenomena. In the specific case of parenting, how far can the economic approach go in explaining how parenting practices evolve over time and across space, and how they differ among individuals? In other words, the task is to link changes in parenting to changes in the incentives and constraints that parents face, given their objectives. In this book, we argue that the economic method is remarkably successful in explaining what parents do.

DIANA BAUMRIND'S PARENTING STYLES

One central choice that we would like to understand is that of parenting style. This concept was coined in the field of developmental psychology. Therefore, we start by laying out how psychologists think about parenting styles and how their approach differs from ours. In developmental psychology, parenting style refers to the broad strategies that parents employ in raising their children. A number of empirical studies in this field (some of them reviewed in later pages) document that parenting styles matter for child development — in other words, children exposed to different parenting practices grow up with different preferences, attitudes, and skills.

The seminal contribution of developmental psychology to our understanding of parenting styles was made by Diana Baumrind of the University of California, Berkeley. Baumrind identified three main parenting styles: authoritarian, permissive, and authoritative. We now briefly introduce these three basic types of parenting.

AUTHORITARIAN PARENTING STYLE

As the name suggests, the authoritarian style is one where parents demand obedience from their children and exercise strict control. In Baumrind's words:

The authoritarian parent attempts to shape, control, and evaluate the behavior and attitudes of the child in accordance with a set standard of conduct, usually an absolute standard, theologically motivated and formulated by a higher authority. She [the parent] values obedience as a virtue and favors punitive, forceful measures to curb self-will at points where the child's actions or beliefs conflict with what she thinks is right conduct. She believes in keeping the child in his place, in restricting his autonomy, and in assigning household responsibilities in order to inculcate respect for work. She regards the preservation of order and traditional structure as a highly valued end in itself. She does not encourage verbal give and take, believing that the child should accept her word for what is right.

A fictional authoritarian parent is the Lutheran bishop Edvard Vergérus in the Swedish director Ingmar Bergman's movie Fanny and Alexander. Austere, strict, and humorless, Vergérus is prepared to inflict merciless punishment on his stepson Alexander for even minor disobedience and disrespect. This includes beating, whipping, and humiliating the wretched child. Alexander's misery is made worse by the lively memories of his life prior to the death of his natural father, when he grew up in the liberal and joyful atmosphere of a family of artists (among them, his mother, Emily). Yet Vergérus is no sadist: he believes that he acts in the long-term interest of Alexander and in deference to God.

Authoritarian parenting can often involve corporal punishment. However, we need to draw a line between authoritarian parenting and outright child abuse. In reality, physical abuse is often a symptom of dysfunctional families where parents suffer drug or alcohol addiction or other forms of psychological disorders. We do not address such social pathologies in this book, and it is not what we have in mind when we speak of authoritarian parents. Instead, we focus on generally well-meaning parents who think that children should obey their parents because this will eventually turn out to be in their own interest.

Mike Agassi, the father of the famous tennis player Andre Agassi, is another example of an authoritarian parent. A former boxer and later tennis coach of his son, Mike made clear to Andre from a tender age that he had to become the best tennis player in the world. Neither Andre's personal taste for playing tennis, nor his passion for other activities, nor any concern for his current wellbeing were supposed to matter or interfere with this goal. In his autobiography, Andre recalls what happened when one day he expressed a desire to play soccer instead of tennis. His father shouted at him: "You're a tennis player! You're going to be number one in the world! You're going to make lots of money. That's the plan, and that's the end of it." Mike was a strong-willed father and, like Vergérus, was no sadist. Rather, both Mike Agassi and Vergérus believed they alone knew what was best for their sons.

While the methods used by Vergérus and Andre Agassi's father are heavy-handed and borderline abusive, authoritarian parents need not be harsh. Some parents may be strict and demand obedience, while at the same time being loving and affectionate. A benign incarnation of an authoritarian parenting style is Teresa, María's mother (i.e., Fabrizio's mother-in-law). María grew up in a Catholic family of six during the Francoist dictatorship in Spain. Teresa is an example of a loving mother who believed her mission was to enforce "a set standard of conduct ... formulated by a higher authority." Rules were neither to be explained, nor to be agreed upon, nor to be internalized. They were just to be obeyed. In Baumrind's words, Teresa believed that children should accept their parents' word for what is right. Different from Vergérus and Mike Agassi, Teresa did not make her children's life miserable. On the contrary, María's parents were generous and prepared to make large economic sacrifices for their children's future: all children received support for higher education and material needs, though always on their parents' terms.

After the two elder daughters adopted the rebellious mood of the 1970s — allegedly because of an excess of freedom and "bad" peer influence — María was sent by her parents to a boarding house run by the Catholic conservative organization Opus Dei. She lived there while she attended college at the University of Valencia. Her parents took on the full economic burden of the boarding house, including food, lodging, and the strict invigilation services of its pious wardens. The rules of the house included a rigid curfew and an appropriate amount of religious ceremony. While María recalls her college years as the saddest time in her whole life, her mother maintains that this was the best gift she could have given to her daughter, and the seed of her future adult-life academic achievements. In spite of holding different views about this and other matters, María loves her mother and regards herself as a lucky daughter.

The story is similar with Matthias's paternal grandfather, Otto. Matthias and his siblings remember Otto as a grumpy old man who had little tolerance for loud children in the house and who would scold them even for minor perceived infractions. For Matthias's father, Dietmar, Otto's authoritarian ways had more severe implications. Otto's view was that for the first twenty-four years of each of his five children's lives, he alone got to decide on what they should study and which career they should pursue. As the first-born child, Dietmar had to bear the brunt of this attitude. For Otto, there was no question that Dietmar's place in life was to ultimately take over the farm. Decisions on Dietmar's career followed from this long-view plan; his own preferences did not matter. Accordingly, after finishing school, Dietmar served as an apprentice for another farmer. He had no role in deciding on this or even in picking the farm where he was supposed to learn the trade: Otto took care of all of that and simply dropped him off at the chosen establishment. After finishing the apprenticeship, Dietmar was enrolled to study to be a teacher because Otto (a teacher himself, like his own father) felt that teaching was an occupation that went along well with farming. Once again, Dietmar's own preferences (he would have rather studied physics or law) did not play any part in the decision-making process. Later on, Otto's aggressive interventions in Dietmar's life led to a temporary falling-out. Yet overall, Otto achieved what he had intended: Dietmar finished his studies, took over the farm, and also had a career in civil service similar to Otto's own. Dietmar's younger siblings were able to gain more independence, but even they were far from free in choosing their own path in life.

PERMISSIVE PARENTING STYLE

The second of Diana Baumrind's parenting styles, permissive parenting, is the polar opposite of authoritarian parenting. Permissive parents follow a laissez-faire approach and let children make their own choices, encouraging their independence. Baumrind writes:

The permissive parent attempts to behave in a non-punitive, acceptant, and affirmative manner towards the child's impulses, desires, and actions. She [the parent] consults with him [the child] about policy decisions and gives explanations for family rules. She makes few demands for household responsibility and orderly behavior. She presents herself to the child as a resource for him to use as he wishes, not as an ideal for him to emulate, nor as an active agent responsible for shaping or altering his ongoing or future behavior. She allows the child to regulate his own activities as much as possible, avoids the exercise of control, and does not encourage him to obey externally defined standards.

In the same way that we do not view authoritarian parents as bad parents, we also do not attach any negative connotation to the term permissive. To be sure, there are some parents who neglect or completely abandon children to themselves. We will refer to such parents as neglectful or uninvolved, borrowing the terminology from the psychologists Eleanor Maccoby and John Martin. In contrast, permissive parents care about their children and want them to do well, but believe that granting a lot of freedom is a good way to accomplish that. In our terminology, the notion of permissive parents could as well be replaced (as we will occasionally do) by that of liberal parents.

The artist and designer Bruce Zeines is an example of someone who has adopted a self-consciously permissive parenting style. A proponent of a radical form of independent learning, Zeines is a founder of the Brooklyn Free School (BFS), a "democratic free school" in New York. The only strict requirement for pupils at the BFS is that they attend the democratic all-school meetings designed to empower students to speak freely. According to Zeines, the school maintains that students can pursue anything as long as it does not interfere with anyone else's pursuits. If it does interfere, then the person involved can call a meeting.

In his article "The Opposite of Tiger Mom," Zeines argues that his views developed in reaction to his own experience in public education. "I spent a lot of time drawing and I wasn't interested in what the teacher was doing. ... I began a path of learning that was forged on my own. I learned more outside of school than inside." This experience turned him into a permissive parent: "As a parent my perspective is pretty much just to leave them alone. Let them find their way. You could call us laid back parents." He would never force his son to do anything he dislikes; rather, he lets him learn through his own enthusiasm. "In public school, kids read because you make them, but forcing kids to do anything makes them not like it. Public school is about obedience, respecting authority. Do we want obedient children? Or do we want free-thinkers, people who can help us out of messes?" He claims that his radical approach has made his child fearless and ready to question adults when he thinks they are wrong or superficial.

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Excerpted from "Love, Money & Parenting"
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Copyright © 2019 Matthias Doepke and Fabrizio Zilibotti.
Excerpted by permission of PRINCETON UNIVERSITY PRESS.
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