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Time preferences and lifetime outcomes

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Author Info

  • Golsteyn, Bart

    ()
    (ROA, Maastricht University)

  • Grönqvist, Hans

    ()
    (Swedish Institute for Social Research (SOFI), Stockholm University)

  • Lindahl, Lena

    ()
    (Swedish Institute for Social Research (SOFI))

Abstract

This paper investigates the relationship between time preferences and lifetime social and economic behavior. We use a Swedish longitudinal dataset that links information from a large survey on children’s time preferences at age 13 to administrative registers spanning over four decades. Our results indicate a substantial adverse relationship between high discount rates and school performance, health, labor supply, and lifetime income. Males and high ability children gain significantly more from being future-oriented. These discrepancies are largest regarding outcomes later in life. We also show that the relationship between time preferences and long-run outcomes operates through early human capital investments.

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Bibliographic Info

Paper provided by IFAU - Institute for Evaluation of Labour Market and Education Policy in its series Working Paper Series with number 2013:22.

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Length: 33 pages
Date of creation: 04 Oct 2013
Date of revision:
Handle: RePEc:hhs:ifauwp:2013_022

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Keywords: Intertemporal choice; personality; preference parameter; human capital; income; health;

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References

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Cited by:
  1. De Paola, Maria & Scoppa, Vincenzo, 2014. "Procrastination, Academic Success and the Effectiveness of a Remedial Program," IZA Discussion Papers 8021, Institute for the Study of Labor (IZA).

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