|Author:||Barnett, Richard1,2,3; Bhattacharya, Joydeep1,2,3; Puhakka, Mikko1,2,3|
1Villanova University, Department of Economics
2Iowa State University, Department of Economics
3University of Oulu, Faculty of Economics and Industrial Management
|Online Access:||PDF Full Text (PDF, 1 MB)|
|Persistent link:|| http://urn.fi/urn:nbn:fi-fe200802011070
|Publish Date:|| 2009-05-28
There is a large body of evidence supporting the notion that a) those who grow up to be patient (forward-looking) do better in life compared to those who do not, and b) parents can inculcate the virtue of delayed gratification in their children by taking the right sort of actions. We study a dynamic model in which parents, for selfish reasons, invest resources to raise patient children. Patience raises the marginal return to human capital accumulation. The patient young do better in school, and hence, get more education but scrimp on investing in their own progeny’s patience. This dynamic can generate intergenerational patience cycles. Generations coming of age with little patience invest more in the productive capacity of their children, while those with greater patience invest more in their own productive capacity.
University of Oulu, Department of Economics, Working papers
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