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Time preferences and lifetime outcomes

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


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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Paper provided by Maastricht University, Graduate School of Business and Economics (GSBE) in its series Research Memorandum with number 065.

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Date of creation: 2013
Date of revision:
Handle: RePEc:unm:umagsb:2013065
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  2. Rützler, Daniela & Sutter, Matthias & Kocher, Martin G. & Trautmann, Stefan T., 2011. "Impatience and Uncertainty: Experimental Decisions Predict Adolescents' Field Behavior," Annual Conference 2011 (Frankfurt, Main): The Order of the World Economy - Lessons from the Crisis 48720, Verein für Socialpolitik / German Economic Association.
  3. Krupka, Erin L. & Stephens, Melvin, 2013. "The stability of measured time preferences," Journal of Economic Behavior & Organization, Elsevier, vol. 85(C), pages 11-19.
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  5. 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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  7. Christopher F. Chabris & David Laibson & Carrie L. Morris & Jonathon P. Schuldt & Dmitry Taubinsky, 2008. "Individual Laboratory-Measured Discount Rates Predict Field Behavior," NBER Working Papers 14270, National Bureau of Economic Research, Inc.
  8. Laibson, David, 1997. "Golden Eggs and Hyperbolic Discounting," The Quarterly Journal of Economics, MIT Press, vol. 112(2), pages 443-77, May.
  9. Gabriel D. Carroll & James J. Choi & David Laibson & Brigitte C. Madrian & Andrew Metrick, 2009. "Optimal Defaults and Active Decisions," The Quarterly Journal of Economics, MIT Press, vol. 124(4), pages 1639-1674, November.
  10. Dohmen, Thomas J & Falk, Armin & Huffman, David & Sunde, Uwe, 2008. "Are Risk Aversion and Impatience Related to Cognitive Ability?," CEPR Discussion Papers 6852, C.E.P.R. Discussion Papers.
  11. 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.
  12. Victor R. Fuchs, 1982. "Economic Aspects of Health," NBER Books, National Bureau of Economic Research, Inc, number fuch82-1, July.
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  14. 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).
  15. 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).
  16. 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.
  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.
  18. Jacob Mincer, 1958. "Investment in Human Capital and Personal Income Distribution," Journal of Political Economy, University of Chicago Press, vol. 66, pages 281.
  19. Heineck, Guido & Anger, Silke, 2010. "The returns to cognitive abilities and personality traits in Germany," Labour Economics, Elsevier, vol. 17(3), pages 535-546, June.
  20. 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.
  21. 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.
  22. Carmit Segal, 2006. "Motivation, test scores and economic success," Economics Working Papers 1124, Department of Economics and Business, Universitat Pompeu Fabra, revised Oct 2008.
  23. Brian C. Cadena & Benjamin J. Keys, 2015. "Human Capital and the Lifetime Costs of Impatience," American Economic Journal: Economic Policy, American Economic Association, vol. 7(3), pages 126-53, August.
  24. 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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