Does time preference change with age?

Research output: Contribution to journalReview article

Abstract

This study looks at compensating differentials in the National Longitudinal Survey of Youth (NLSY) to derive estimates of the levels of time preference for labor force participants in each of 15 waves of data from 1979 to 1994. With these estimates the evolution of time preference over the life course is described. Future utility among labor force participants appears to be valued more highly by subjects who are older, more schooled, white, or male. Controlling for schooling level, a higher IQ is associated with a preference for more immediate rewards. If social rates of time preference are correlated with individual rates of time preference then population aging could create intergenerational asymmetries in the social rate of time preference. This phenomenon could make the optimal investments of young populations appear selfish to future generations that are older.

Original languageEnglish (US)
Pages (from-to)583-602
Number of pages20
JournalJournal of Population Economics
Volume17
Issue number4
DOIs
StatePublished - Dec 1 2004

Keywords

  • Aging
  • Compensating differentials
  • Time preference

ASJC Scopus subject areas

  • Demography
  • Economics and Econometrics

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