Parenting with Style: Altruism and Paternalism in Intergenerational Preference Transmission

We develop a theory of intergenerational preference transmission that rationalizes the choice between parenting styles. Parents maximize an objective function that combines Beckerian altruism and paternalism towards children. They can affect their children's choices via two channels: either by influencing children's preferences or by imposing direct restrictions on their choice sets. Different parenting styles (authoritarian, authoritative, permissive) emerge as equilibrium outcomes, and are affected both by parental preferences and by the socioeconomic environment. The theory is consistent with the decline of authoritarian parenting in industrialized countries, and with the greater prevalence of permissive parenting in countries characterized by low inequality.