Socioeconomic differences in early childhood time preferences

Socioeconomic differences in early childhood time preferences
Liam Delaneya, , , Orla Doyleb

a UCD Geary Institute, UCD School of Economics, & UCD School of Public Health and Population Science, University College Dublin
b UCD Geary Institute & UCD School of Public Health and Population Science, University College Dublin
Received 13 June 2009; revised 24 June 2011; Accepted 31 August 2011. Available online 17 September 2011.

Abstract
This article examines the extent to which early childhood socioeconomic differences emerge in hyperactivity, impulsivity and persistence, all of which are psychometric analogues to how economists conceptualise time discounting. We control for a wide range of factors including parental investment and proxies for maternal time preferences. Our results show substantial social class variations across measures at age 3. We find weak evidence that these measures are predicted by differential maternal behaviours (e.g. savings behaviour, smoking) but relatively stronger evidence that these traits are transmitted through the parents’ own non-cognitive skills (self-esteem, attachment) and parental time investments (time spent reading to the child and teaching the child to write, sing).

Highlights
► This paper examines socioeconomic differences in proxies for time preferences among 3-year old children. ► It finds marked socioeconomic differences across a wide range of measures of time preferences. ► Variables such as maternal depression and attachment, parental inputs and maternal behaviours also predict child time preferences. ► However, even controlling for this wide range of covariates, a large socioeconomic gradient exists. ► Further research should examine the extent to which child preferences are exogenously shaped by parental factors and home environments.

Keywords: D03 Behavioural Economics; D9 Intertemporal Choice