PARENTING STYLE AND OLD AGE SUPPORT.

Abstract

In this thesis, we attempt to shed some light on the economic determinants of parenting style by constructing a three-period overlapping generations model that features backward altruism as a driving force behind old age transfers. We find that the degree of backward altruism correlates negatively with the steady state levels of education investment and income. The steady state level of old age transfers displays a U-shaped relationship with backward altruism. In equilibrium, parents are more inclined towards an involved parenting style as opposed to a hands-off one when the returns to human capital are higher, or when the time or attention cost of parenting is lower. Conversely, stronger backward altruism shifts the parenting equilibrium in favour of relaxed parenting. Our findings suggest that the combination of high returns on human capital, a relatively low parenting cost, and limited parental income could account for the historical prevalence of a more involved parenting style in Asia.