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Time Preferences and Lifetime Outcomes

  • Golsteyn, Bart H.H.


    (Maastricht University)

  • Grönqvist, Hans


    (Uppsala University)

  • Lindahl, Lena


    (SOFI, Stockholm University)

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 five 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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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 7165.

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Length: 41 pages
Date of creation: Jan 2013
Date of revision:
Publication status: published as 'Adolescent Time Preferences Predict Lifetime Outcomes' in: Economic Journal, 2014, 124 (580), F739-F761
Handle: RePEc:iza:izadps:dp7165
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