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Time preferences and lifetime outcomes

  • Golsteyn, B.H.H.

    (General Economics 2 (Macro))

  • Grönqvist, H.

    (External organisation)

  • Lindahl, L.

    (External organisation)

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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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: 01 Jan 2013
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Handle: RePEc:unm:umagsb:2013065
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