Time Preferences and Lifetime Outcomes
41 Pages Posted: 2 Feb 2013
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
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