Time preferences and lifetime outcomes

Author: Bart Golsteyn, And Hans Grönqvist, And Lena Lindahl, And

Published in: The Economic Journal, Feature Issue, 2014, vol.124, no.580, pp. F739-F761

Summary of Working paper 2013:22

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.