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The economic fruits of patience

Time preference has substantial economic consequences. To a growing literature that shows patience to be an important indicator of economic outcomes, this column presents new evidence from a large administrative dataset that tracks children into adulthood. Those who reported more patient preferences as children move on to better labour market and health outcomes, and are less likely to become criminals.

It is challenging but necessary to teach children to be patient, as all parents know. In the short run, patience instilled in children can counteract impulsivity and acting-out. Our research shows that impatience predicts a range of subsequent problems in the long run.

Earlier studies have documented that impatience among adults is a strong predictor of outcomes such as occupational choice and credit card borrowing (Burks et al. 2009, Meier and Sprenger 2010). Sutter et al. (2011), and Castillo et al. (2011) studied the consequences of impatience among children. Sutter et al. use a sample of 661 children aged 10 to 18 to show that impatience correlates with their Body Mass Index (BMI), savings, and spending on alcohol and tobacco. Castillo et al. (2011) report that children aged 13 to 15 who were less patient are more likely to get a disciplinary referral in the following school year.

Few previous studies have been able to follow subjects over a longer period of time. The seminal work by Walter Mischel and co-authors1 revealed that children aged four who could wait a longer time for a larger treat (rather than accepting a smaller immediate treat) scored higher on achievement tests around one decade later. More recently, Moffitt et al. (2011) followed around 1,000 children from age three to 32, and find substantial positive effects of self-control on health and wealth. Using data from the National Longitudinal Survey of Youth (NLSY), Cadena and Keys (2011) report that individuals perceived as restless by an interviewer performed worse in terms of educational attainment and labor supply in young adulthood.

Our research contributes to these findings by showing that patience among adolescents matters in the very long run and for a wider variety of outcomes. In Golsteyn, Grönqvist and Lindahl (2013), we document the relationship between time preference during adolescence and long-run social and economic outcomes. We asked 13,606 Swedish children aged 13 whether they would prefer to receive $140 now or $1,400 in five years. There were five possible answers, the two extremes being “certainly now” and “certainly in five years”. Using administrative data, we were able to trace outcomes of the children throughout life, observing their completed education, results on military enlistment tests, fertility decisions, indicators of health, labor market success, and lifetime income.

Our results indicate that time preferences are strongly associated with lifetime outcomes. Impatient children perform worse in compulsory and secondary school. The difference in school performance between more and less future-oriented children is substantial and similar to the gender gap in school performance. Additionally, impatient children earn less lifetime income, are more often unemployed, and take up more welfare. Our results also show that people who are impatient as a child are more prone to die young, to become obese, or to become a teenage mother. Males and high ability children gain significantly more from being future-oriented.

Earlier research has shown that impatience correlates with cognitive ability (Dohmen et al. 2010, Benjamin et al. 2013). Our results are robust when we control for cognitive ability and other potentially important confounding factors such as parental socioeconomic status.

Using extensive criminal records, we find in a second paper that children who are less able to delay rewards are also more likely to become criminals later in life (Åkerlund, Golsteyn, Grönqvist and Lindahl 2014). According to economic theory, individuals decide whether or not to engage in crime based on immediate benefits relative to the risk of punishment. The predictive nature of the children’s stated time preferences can therefore be explained by the link between placing a lower value on the future and the preference for the type of immediate rewards that crime provides. In addition, such individuals are less likely to be deterred by the potential cost of getting caught.

After accounting for cognitive ability and the parents’ socioeconomic status, our results show that the impatient children who said that they definitely wanted the money now were 32% more likely to be convicted of a crime over the next 18 years compared to the children who said they would wait for the bigger reward. Our results are in line with Nagin and Pogarsky (2004) who measure discount rates among adolescents (grades 7-12) and ask them one year later whether they were involved in criminal activities during that year. They found that respondents with high discount rates were more involved in criminal activities. Similarly, the results in Lee and McCrary (2009) and Jacob, Lefgren, and Moretti (2007) also provide suggestive evidence that offenders may have short time horizons.

An important result in both of our papers is that the relationship between time preferences and lifetime outcomes is mediated by early human capital investments. This suggests that time preferences affect educational attainment, which in turn has an impact on crime and other outcomes in life. Some studies have suggested that investing in education makes individuals more patient (e.g. Perez-Arce 2011). Our results therefore imply that one channel through which educational attainment reduces criminal behaviour and adverse outcomes is by making people more patient.


Åkerlund, D, B Golsteyn, H Grönqvist, and L Lindahl (2014), “Time Preferences and Criminal Behaviour,” IZA Discussion paper 8168.

Benjamin, D, S Brown, and J Shapiro (2013), “Who is ‘Behavioural’? Cognitive Ability and Anomalous Preferences,” Journal of the European Economic Association 11 (6), 1231-1255.

Burks, S V, J P Carpenter, L Goette, and A Rustichini (2009), “Cognitive Skills Affect Economic Preferences, Strategic Behaviour, and Job Attachment,” Proceedings of the National Academy of Sciences 106 (19), 7745-7750.

Cadena, B and B Keys (2014), “Human Capital and the Lifetime Costs of Impatience,” forthcoming in American Economic Journal: Economic Policy.

Castillo, M, P Ferraro, J Jordan, and R Petrie (2011), “The Today and Tomorrow of Kids: Time Preferences and Educational Outcomes of Children,” Journal of Public Economics 95 (11- 12), 1377-85.

Dohmen, T, A Falk, D Huffman, and U Sunde (2010), “Are Risk Aversion and Impatience Related to Cognitive Ability?,” American Economic Review 100(3), 1238-60.

Golsteyn, B, H Grönqvist, and L Lindahl (2013), “Adolescent Time Preferences Predict Lifetime Outcomes,” Economic Journal, forthcoming.

Jacob, B, L Lefgren, and E Moretti (2007), “The Dynamics of Criminal Behaviour: Evidence from Weather Shocks,” Journal of Human Resources 42(3), 489-527.

Lee, D and J McCrary (2009), “The Deterrence Effect of Prison: Dynamic Theory and Evidence,” unpublished manuscript.

Meier, S and C Sprenger (2010), “Present-Biased Preferences and Credit Card Borrowing,” American Economic Journal: Applied Economics 2, 193–210.

Mischel, W, Y Shoda, and M Rodriguez (1989), “Delay of Gratification in Children,” Science 244 (4907), 281-302.

Moffitt, T E, L Arseneault, D Belsky, N Dickson, R J Hancox, H Harrington, R Houts, R Poulton, B W Roberts, S Ross, N R Sears, W M Thomsom, and A Caspi (2011) “A Gradient of Childhood Self-Control Predicts Health, Wealth, and Public Safety,” Proceedings of the National Academy of Sciences 108 (7), 2693-2698.

Nagin, D, G Pogarsky (2004), “Time and Punishment: Delayed Consequences and Criminal Behaviour,” Journal of Quantitative Criminology 20 (4), 295-317.

Perez-Arce, F (2011), “The Effect of Education on Time Preferences,” Rand Labor and Population Series WR-844.

Sutter, M, M Kocher, D Rutzler, and S Trautmann (2011), “Impatience and Uncertainty: Experimental Decisions Predict Adolescents’ Field Behaviour,” forthcoming in American Economic Review.


1 See, e.g., Mischel, Shoda and Rodriguez (1989).

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