Time Preferences and Lifetime Outcomes

41 Pages Posted: 2 Feb 2013

See all articles by Bart Golsteyn

Bart Golsteyn

Maastricht University - Research Centre for Education and the Labour Market (ROA); IZA Institute of Labor Economics; Stockholm University - Swedish Institute for Social Research (SOFI)

Hans Gronqvist

Stockholm University

Lena Lindahl

Stockholm University - Faculty of Social Sciences

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 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.

Keywords: intertemporal choice, personality, preference parameter, human capital, income, health

JEL Classification: D03, D91, J01

Suggested Citation

Golsteyn, Bart and Gronqvist, Hans and Lindahl, Lena, Time Preferences and Lifetime Outcomes. IZA Discussion Paper No. 7165. Available at SSRN: https://ssrn.com/abstract=2210825

Bart Golsteyn (Contact Author)

Maastricht University - Research Centre for Education and the Labour Market (ROA) ( email )

P.O. Box 616
Maastricht, MD6200
Netherlands

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Stockholm University - Swedish Institute for Social Research (SOFI) ( email )

Kyrkgatan 43B
SE-106 91 Stockholm
Sweden

Hans Gronqvist

Stockholm University ( email )

Universitetsvägen 10
Stockholm, Stockholm SE-106 91
Sweden

Lena Lindahl

Stockholm University - Faculty of Social Sciences ( email )

SE-106 91 Stockholm
Sweden

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