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Title: Human Capital and the Lifetime Costs of Impatience
Resulting in 1 citation.
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Cadena, Brian C. Keys, Benjamin J. |
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Human Capital and the Lifetime Costs of Impatience Working Paper, Social Science Research Network (SSRN), August 10, 2012; Revised May 2014. Also: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1674068 Cohort(s): NLSY79 Publisher: Social Science Electronic Publishing, Inc. Keyword(s): Armed Forces Qualifications Test (AFQT); Behavior; Behavioral Differences; Behavioral Problems; College Dropouts; Earnings; Educational Aspirations/Expectations; Educational Attainment; Human Capital; National Longitudinal Study of Adolescent Health (AddHealth); Noncognitive Skills; Personality/Big Five Factor Model or Traits Permission to reprint the abstract has not been received from the publisher. In this paper, we examine the role of impatience in the formation of human capital - arguably the most important investment decision individuals make during their lifetimes. We pay particular attention to a set of investment behaviors that cannot be explained solely by variation in exponential discount rates. Using data from the NLSY and a straightforward measure of impatience, we find that impatient people systematically acquire lower levels of multiple measures of human capital and that a substantial fraction of these differences arise from dynamically inconsistent behavior, such as starting an educational program but failing to complete it. The cumulative investment differences result in the impatient earning 18 percent less and expressing significantly more regret as this cohort reaches middle age. |
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Bibliography Citation
Cadena, Brian C. and Benjamin J. Keys. "Human Capital and the Lifetime Costs of Impatience." Working Paper, Social Science Research Network (SSRN), August 10, 2012; Revised May 2014. |