Pension Participation: Do Parents Transmit Time Preference?
- 341 Downloads
A wide range of economic and health behaviors are influenced by individuals’ attitudes toward the future—including investments in human capital, health capital and financial capital. Intergenerational correlations in such behaviors suggest an important role the family may play in transmitting time preferences to children. This article presents a model of parental investment in future-oriented capital, where parents shape their children’s time preference rates. The research identifies a dual role for a parent’s time preference rate in the process of shaping the offspring’s attitude toward the future, and discusses paths through which parents may socialize children to be patient. The model’s implications are studied by investigating the parent–child correlation in pension participation using data from the Panel Study of Income Dynamics
KeywordsFamily and economic issues Human capital theory Intergenerational correlations Pensions Saving
- Becker, G. S. (1993). Human capital: A theoretical and empirical analysis, with special reference to education (3rd ed.). Chicago: University of Chicago Press.Google Scholar
- Carneiro, P., & Heckman, J. (2003). Human capital policy. NBER working paper #9495, National Bureau of Economic Research, Cambridge, MA.Google Scholar
- Chiteji, N., Gouskova, E., & Stafford, F. (2006). Financial marketplace participation and pension holdings over the life course. In J. G. Nembhard & N. Chiteji (Eds.), Wealth accumulation and communities of color in the United States (pp. 191–215). Ann Arbor, MI: University of Michigan Press.Google Scholar
- Doepke, M., & Zilibotti, F. (2005). Social class and the spirit of capitalism. Journal of the European Economic Association, 3(2–3), 516–524.Google Scholar
- Dohmen, T., Falk, A., Huffman, D., & Sunde, U. (2006). The intergenerational transmission of risk and trust attitudes. IZA discussion paper #2380, Institute for the Study of Labor, Bonn, Germany.Google Scholar
- Fuchs, V. R. (1982). Time preference and health: An exploratory study. In V. R. Fuchs (Ed.), Economic aspects of health (pp. 93–120). Chicago: University of Chicago Press.Google Scholar
- Ippolito, R. (1997). Pension plans and employee performance. Chicago: University of Chicago Press.Google Scholar
- Knowles, J. A., & Postlewaite, A. (2005). Do children learn to save from their parents. PARC working paper series #05-06, University of Pennsylvania, Philadelphia, PA.Google Scholar
- Long, J., & Ferrie, J. (2005). A tale of two labor markets: Intergenerational occupational mobility in Britain and the U.S. since 1850. NBER working paper #11253, National Bureau of Economic Research, Cambridge, MA.Google Scholar
- Lusardi, A. (2003). Planning and saving for retirement. Unpublished manuscript, Dartmouth College. Retrieved December 25, 2007, from http://www.dartmouth.edu/~alusardi/.
- McKernan, S., & Sherraden, M. (2008). Asset-building and low-income families. Washington: Urban Institute Press.Google Scholar
- Mulligan, C. B. (1997). Parental priorities and economic inequality. Chicago: University of Chicago Press.Google Scholar
- Munasinghe, L., & Sicherman, N. (2006). Why do dancers smoke? Time preference, occupational choice, and wage growth. Eastern Economic Journal, 32(4), 595–616.Google Scholar
- Samwick, A. A. (2000). The effects of social security reform on private pensions. SIEPR policy research paper # 00-17, Stanford Institute for Economic Policy Research, Stanford, CA.Google Scholar
- Sanders, C. K., & Porterfield, S. L. (2010). The ownership society and women: Exploring female householders’ ability to accumulate assets. Journal of Family and Economic Issues. doi: 10.1007/s10834-009-9175-6.
- Solon, G. (1992). Intergenerational income mobility in the United States. American Economic Review, 82(3), 393–408.Google Scholar
- Toledo, M. (2005). On the intergenerational persistence of work hours. Unpublished manuscript, University of Rochester. Retrieved January 21, 2010, from http://184.108.40.206/en/publikationen/dfgflex/workshop_06/Toledo.pdf.