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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
Date of revision:
Handle: RePEc:unm:umaror:2013019

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Postal: P.O. Box 616, 6200 MD Maastricht
Phone: 043-3883647
Fax: 043-3210999
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Web page: http://www.maastrichtuniversity.nl/
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Related research

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. Gaudecker, Hans-Martin von & van Soest, Arthur & Wengström, Erik, 2011. "Experts in Experiments: How Selection Matters for Estimated Distributions of Risk Preferences," IZA Discussion Papers 5575, Institute for the Study of Labor (IZA).
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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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