Life Expectancy, Age, and Patience

Abstract Models of intertemporal choice typically assume that decision makers are impatient and often refer to the limited length of life as motivation for this assumption. Yet direct empirical evidence for the association between life expectancy and patience is scarce and restricted to variation in age. This paper documents distinct associations of patience with life expectancy and age. The analysis is based on data for 80,000 individuals in 76 countries and exploits variation in expected remaining years of life from period life tables. The empirical findings document that higher life expectancy is associated with a greater patience, conditional on age. Our findings also show that the association is unique to patience and does not pertain to other preferences, provide evidence for a hump-shaped age profile, document an association of patience with institutions in addition to life expectancy, hold conditional on country-cohort-specific variation in development, and provide indirect evidence for selective mortality influencing the life expectancy-patience nexus.