Decision-making by Children

In this paper, we examine the determinants of decision-making power by children and young adolescents. Moving beyond previous economic models that treat children as goods consumed by adults, we develop a noncooperative model of parental control of child behavior and child resistance. Using child reports of decision-making and psychological and cognitive measures from the NLSY79 Child Supplement, we examine the determinants of shared and sole decision-making based on indices created from seven domains of child activity. We find that the determinants of sole decision-making by the child and shared decision-making with parents are quite distinct: sharing decisions appears to be a form of parental investment in child development rather than a simple stage in the transfer of authority. In addition, we find that indicators of child capabilities and preferences affect reports of decision-making authority in ways that suggest child demand for autonomy as well as parental discretion in determining these outcomes. ∗ We gratefully acknowledge comments from participants in the AEA session “Bargaining in Families” at the 2005 ASSA meetings in Philadelphia, PA and from seminar participants at Cornell University, UCLA, UW, Washington University in St. Louis, the Institute for Social and Economic Research at the University of Essex, the University of Warwick, and the editor and referees of this journal. Financial support was provided by NICHD (R01 HD45635-2 – “Child agency in resource allocation,” Romich, Principal Investigator) and by Lundberg’s Castor Professorship. Thanks to Xiang Gao, Lisa Keating, and Cori Mar for invaluable assistance.