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Introducing “Love, Money, and Parenting”

How economics can help explain how we raise our kids today

We are two economists who just published a book entitled “Love, Money, and Parenting: How Economics Explains the Way We Raise Our Kids.” The book uses the tools of economics to understand why, and how, child-rearing practices vary so much over time and across societies. We argue, and document with data analysis, that the growth of “intensive” parenting styles (helicopter parenting, tiger moms, etc.) is not just a new fashion, but is the response of loving parents to a trend of growing of income inequality. A second focus of the book is to point out how recent economic changes have created a “parenting gap” in many societies, meaning that kids from rich and poor families do not get the same opportunities, which puts social mobility and the ideal of equal opportunity for all at risk. On this blog, we will lay out the key findings of our book, we will talk about recent developments in research on parenting, and we will discuss how changes to economic policy, family policy, and the design of the education system can help push against the rise in the parenting gap.

We came to write “Love, Money, and Parenting” when our academic research crossed paths with our own lives. In our academic research, we have long worked on issues related to economic growth and development, including questions such as why some countries are rich and others are poor, and why some societies change rapidly while others are seemingly static. Over time, this research led us to focus on families and child rearing. Much of economic growth is due to what economists call “human capital,” i.e., accumulated education and experience, and much of human capital accumulation takes place within the family. Values and attitudes in a society, including patience, the work ethic, and “entrepreneurial spirit” also matter for whether societies thrive, and these are transmitted within the family, too. Our recent academic work is concerned with understanding how economic conditions, policies, and institutions shape the transmission of human capital and values within families, and how this matters for economic development.

Photo by Josh Willink from Pexels
Source: Photo by Josh Willink from Pexels

Child rearing has also been the focus of our private lives: Fabrizio is the father of a daughter, and Matthias is the father of three boys. Here one thing that struck us is how different our child-rearing choices have been from those of our own parents. We both were children in the 1970s, Fabrizio in Italy, Matthias in Germany. Despite the different countries, there are many similarities in our experiences. Most importantly, our parents left us a lot of freedom and did not interfere much in our lives. As schoolchildren, in the afternoons we were usually free to do what we wanted, such as going to friends’ houses or playing soccer with other kids in neighborhood. Our parents were not much concerned with how well we did in school, other than making sure that we did not fall so far behind in a subject to risk failing the grade.

Before having children, we expected that we would be similarly liberal parents for our own children. But to our own surprise, our choices ended up being shaped more by the environment we live in now, rather than our childhood experiences. Like many parents today, we are more “intense” that our own parents were, investing more time in interacting with our children, and probably being more worried about school. On reflection, we realized that the economic way of analyzing parenting that we used in research could also explain how our own choices of parents, and those of parents like us, could be accounted for by changed economic conditions.

So what, exactly, do we mean by the economic way of thinking about parenting? At its core, economics is a social science that aims to understand how people make decisions. Whether these people are consumers deciding which detergent to buy or entrepreneurs deciding how to invest in their business, economists start with the objectives that these people are trying achieve (such as to maximize utility or profit), and the constraints under which they operate (such as how much money they have or how much demand there is for their products).

Baseline economic models posit that people act deliberately and purposefully in achieving their objectives. In “Love, Money, and Parenting,” we apply the same logic to parenting. Our view is that the objective that parents try to achieve is for their kids to be happy and to do well – hence the “Love” in the title of the book. The constraints include financial constraints (“Money”), but also limited time, limited knowledge, and the institutions and general economic conditions of the society the family lives in. These constraints create tradeoffs that parents respond to. To be clear, we are not saying parents continuously think about all the different parenting choices explicitly and weigh them to make the best choice – usually, they will just do what seems “right.” But we argue that what seems right is at least in part informed by economic forces.

The aspect of the economic environment that turns out to be most important for parenting is economic inequality. We found that in societies where there is a large gap between the rich and the poor, parents perceive more pressure to push their children to excel in school and end up with lucrative and stable careers. In more equal societies, parents can afford to be more relaxed, and instead give freedom to their children to explore on their own how they want to live their lives. We find that this simple contrast between more and less equal societies can explain a lot about how parenting differs across countries and over time, including the contrast between our own relaxed childhoods and the more intense parenting styles of many American parents today.

In the following weeks, we will blog about specific implications of the economics of parenting and about how these implications measure up to empirical evidence. We discuss how rising economic inequality in industrialized countries has led to a spread of more intense parenting styles in recent decades; how inequality can explain a lot of how parenting differs across countries today; and how rising inequality has also resulted in a rising “parenting gap” between rich and poor families, with repercussions for social mobility and equality of opportunity. We will also go back further in history to co consider how the economics of parenting can account for the gradual decline of authoritarian parenting in the past two centuries and the different value systems across broad social classes in history.

Unusually for a parenting blog, one thing that we will not do is hand out parenting advice. We view our task as social scientists to understand why people make certain choices, rather than telling them which choices they should be making. We believe that the vast majority of parents love their children and do the best they can in raising them. They are also intimately familiar with their children’s needs, personalities, and they know the circumstances of the society they live in. In our view most parents are, by and large, getting it right, and we are not in a position to tell them any better.

This does not mean, however, that all is well in the world of parenting. In fact, we believe that trends such as the growing parenting gap in society pose a serious challenge that needs to be addressed. But in our view the call for change should not go to parents, who are trying to give their children the best shot given the circumstances they face, but to policymakers, who have a chance to shape what these circumstances are. Our research suggests that policy initiatives such as expanded early-childhood education, broader access to vocational training and higher education, and also redistributive fiscal policy could have large beneficial impacts on what parenting is like in the modern world. So if there is one thing we have to say to parents, it is to be active as political actors and call for changes to policies and institutions that shape family life today.

We will be back next week with a detailed post on a core finding of “Love, Money, and Parenting” – the intimate connection between economic inequality and the “intensity” of parenting styles in a country.


Matthias Doepke and Fabrizio Zilibotti (2019). Love, Money, and Parenting: How Economics Explains the Way We Raise Our Kids. Princeton: Princeton University Press.

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