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IFAU - Institute for Evaluation of Labour Market and Education Policy Working Paper Series
IFAU - Institute for Evaluation of Labour Market and Education Policy

No 2013:22:
Time preferences and lifetime outcomes

Bart Golsteyn (), Hans Grönqvist () and Lena Lindahl ()

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 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.

Keywords: Intertemporal choice; personality; preference parameter; human capital; income; health; (follow links to similar papers)

JEL-Codes: D03; D91; J01; (follow links to similar papers)

33 pages, October 4, 2013

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This paper is published as:
Golsteyn, Bart, Hans Grönqvist and Lena Lindahl, (2014), 'Adolescent Time Preferences Predict Lifetime Outcomes', The Economic Journal, Vol. 124, November, No. 580, pages 739-761

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