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Time preferences and lifetime outcomes

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Author Info

  • Golsteyn B.H.H.
  • Lindahl L.
  • Grönqvist H.

    (ROA)

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 childrens 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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File URL: http://pub.maastrichtuniversity.nl/441e7d95-a149-426b-9e28-e09cf49ce1ac
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Bibliographic Info

Paper provided by Maastricht University, Research Centre for Education and the Labour Market (ROA) in its series ROA Research Memorandum with number 019.

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Date of creation: 2013
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Handle: RePEc:unm:umaror:2013019

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Web page: http://www.maastrichtuniversity.nl/
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Keywords: Behavioral Economics: Underlying Principles; Intertemporal Consumer Choice; Life Cycle Models and Saving; Labor Economics: General;

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References

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  1. 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.
  2. James Choi & David Laibson & Brigitte Madrian & Andrew Metrick, 2005. "Optimal Defaults and Active Decisions," Levine's Bibliography 666156000000000488, UCLA Department of Economics.
  3. Dohmen, Thomas J. & Falk, Armin & Huffman, David & Sunde, Uwe, 2010. "Are risk aversion and impatience related to cognitive ability?," Munich Reprints in Economics 20063, University of Munich, Department of Economics.
  4. Sutter, Matthias & Kocher, Martin G. & Daniela, G.-R. & Trautmann, Stefan T., 2013. "Impatience and uncertainty: Experimental decisions predict adolescents' field behavior," Munich Reprints in Economics 18223, University of Munich, Department of Economics.
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  7. Becker, Gary S & Mulligan, Casey B, 1997. "The Endogenous Determination of Time Preference," The Quarterly Journal of Economics, MIT Press, vol. 112(3), pages 729-58, August.
  8. Heineck, Guido & Anger, Silke, 2010. "The Returns to Cognitive Abilities and Personality Traits in Germany," EconStor Open Access Articles, ZBW - German National Library of Economics, pages 535-546.
  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.
  10. Chabris, Christopher F. & Laibson, David I. & Morris, Carrie L. & Schuldt, Jonathon P. & Taubinsky, Dmitry, 2008. "Individual Laboratory-Measured Discount Rates Predict Field Behavior," Scholarly Articles 11130522, Harvard University Department of Economics.
  11. Laibson, David I., 1997. "Golden Eggs and Hyperbolic Discounting," Scholarly Articles 4481499, Harvard University Department of Economics.
  12. Eric Bettinger & Robert Slonim, 2006. "Patience among children," Artefactual Field Experiments 00043, The Field Experiments Website.
  13. Shane Frederick & George Loewenstein & Ted O'Donoghue, 2002. "Time Discounting and Time Preference: A Critical Review," Journal of Economic Literature, American Economic Association, vol. 40(2), pages 351-401, June.
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  16. Jacob Mincer, 1958. "Investment in Human Capital and Personal Income Distribution," Journal of Political Economy, University of Chicago Press, vol. 66, pages 281.
  17. Maarten J. Voors & Eleonora E. M. Nillesen & Philip Verwimp & Erwin H. Bulte & Robert Lensink & Daan P. Van Soest, 2012. "Violent Conflict and Behavior: A Field Experiment in Burundi," American Economic Review, American Economic Association, vol. 102(2), pages 941-64, April.
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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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