Parenting with Patience: Parental Incentives and Child Development

Daniela Del Boca, Christopher Flinn, Ewout Verriest and Matthew Wiswall

CHILD Working Papers Series from Centre for Household, Income, Labour and Demographic Economics (CHILD) - CCA

Abstract: We construct a dynamic model of child development where forward-looking parents and children jointly take actions to increase the child’s cognitive and non-cognitive skills within a Markov Perfect Equilibrium framework. In addition to time and money investments in their child, parents also choose whether to use explicit incentives to increase the child’s self-investment, which may reduce the child’s future intrinsic motivation to invest by reducing the child’s discount factor. We use the estimated model parameters to show that the use of extrinsic motivation has large costs in terms of the child’s future incentives to invest in themselves.

Keywords: Time allocation; Child development; Parenting styles (search for similar items in EconPapers)
Pages: 103 pages
Date: 2025
New Economics Papers: this item is included in nep-neu
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Persistent link: https://EconPapers.repec.org/RePEc:cca:wchild:127

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