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Abstract We study the consequences of unequal parenting on children’s long-term outcomes. Our analysis reveals that parenting style exerts a distinct influence on children’s development, separate from socio-economic factors such as education and race. We contend that parenting styles adapt to the evolving environment in which children are raised. Although correlated with socio-economic family characteristics, this factor demonstrates an independent impact. Recognizing how parents respond to economic shifts is crucial for deriving policy implications. Supporting this perspective, our findings indicate that parenting choices exhibit systematic variation across countries and local communities with varying formal and informal institutions. Therefore, a critical next step in addressing inequality in early-childhood outcomes involves examining how parents will modify their own behaviours in response to potential policy changes.