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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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  1. David M. Bishai, 2004. "Does time preference change with age?," Journal of Population Economics, Springer, vol. 17(4), pages 583-602, December.
  2. Laibson, David, 1997. "Golden Eggs and Hyperbolic Discounting," The Quarterly Journal of Economics, MIT Press, vol. 112(2), pages 443-77, May.
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  8. Borghans,Lex & Golsteyn,Bart H.H., 2005. "Time Discounting and the Body Mass Index," ROA Research Memorandum 006, Maastricht University, Research Centre for Education and the Labour Market (ROA).
  9. Christopher Chabris & David Laibson & Carrie Morris & Jonathon Schuldt & Dmitry Taubinsky, 2008. "Individual laboratory-measured discount rates predict field behavior," Journal of Risk and Uncertainty, Springer, vol. 37(2), pages 237-269, December.
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  16. Lena Lindahl, 2011. "A comparison of family and neighborhood effects on grades, test scores, educational attainment and income—evidence from Sweden," Journal of Economic Inequality, Springer, vol. 9(2), pages 207-226, June.
  17. Anders Bohlmark & Matthew J. Lindquist, 2006. "Life-Cycle Variations in the Association between Current and Lifetime Income: Replication and Extension for Sweden," Journal of Labor Economics, University of Chicago Press, vol. 24(4), pages 879-900, October.
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  19. Grossman, Michael, 1972. "On the Concept of Health Capital and the Demand for Health," Journal of Political Economy, University of Chicago Press, vol. 80(2), pages 223-55, March-Apr.
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  22. Marco Castillo & Paul Ferraro & Jeff Jordan & Ragan Petrie, 2008. "The Today and Tomorrow of Kids," Experimental Economics Center Working Paper Series 2008-10, Experimental Economics Center, Andrew Young School of Policy Studies, Georgia State University.
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Cited by:
  1. Maria De Paola & Vincenzo Scoppa, 2014. "Procrastination, Academic Success And The Effectiveness Of A Remedial Program," Working Papers 201401, Università della Calabria, Dipartimento di Economia, Statistica e Finanza (Ex Dipartimento di Economia e Statistica).

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