Parenting Decisions and Child Skill Development

I develop and estimate a dynamic model of child cognitive and non-cognitive skill developmentin a Markov Perfect Equilibrium framework, where both parents and children play an active role inthe child skill development process. Children choose how much of their time to allocate towardstudying, while their parents make time allocation decisions, and decide whether to adopt anauthoritarian, authoritative, or permissive parenting style. Each parenting style influences child skilldevelopment through two channels, they augment child study time decisions, and have a separatedirect impact on cognitive and non-cognitive skills. I use the estimated model parameters to showthat an authoritative parenting style is best at increasing child cognitive and non-cognitive skills,while a permissive parenting style is typically the worst.