Economics External Seminar: Claus Thustrup Kreiner (KU)

12 June 2019, 1.00 PM - 12 June 2019, 2.00 PM

Claus Thustrup Kreiner (KU)

1B6 Priory Road Complex

Title: Time Discounting and Wealth Inequality

Abstract: This paper documents a large association between individuals’ time discounting in incentivized experiments and their positions in the real-life wealth distribution derived from Danish high-quality administrative data for a large sample of middle-aged individuals. The association is stable over time, exists throughout the wealth distribution, and remains large after controlling for education, income profile, school grades, initial wealth, parental wealth, credit constraints, demographics and other behavioral parameters elicited in the experiment. Our results suggest that savings behavior is a driver of the observed association between patience and wealth inequality as predicted by standard savings theory.

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