Publication detail

Time Discounting, Education and Growth: Evidence and a Simple Model (M. Bauer, J. Chytilová)

Author(s): doc. PhDr. Michal Bauer Ph.D.,
doc. PhDr. Julie Chytilová Ph.D.,
Type: Articles in journals with impact factor
Year: 2009
Number: 1
ISSN / ISBN: 0015-1920
Published in: Czech Journal of Economics and Finance 59 (1):71-86
Publishing place: Prague
Keywords: growth, human capital, education, time discounting, poverty
JEL codes: D9, I2, O1
Suggested Citation:
Grants: IES Research Framework Institutional task (2005-2011) Integration of the Czech economy into European union and its development
Abstract: In the paper we propose a new channel through which education may promote economic growth: education makes people more patient and more patient people are more likely to save, invest or send children to school. The paper first summarizes the results of field studies which we conducted in two very different poor countries: Uganda and India. In both countries the findings are consistent with the causal effect of education on subjective discount rate. In the second part of the paper we build a simple two-period human-capital-driven growth model where subjective discount rate depends on the level of human capital. This new assumption gives rise to a possibility of multiple development regimes and the model illustrates wider role of education in tackling possible development traps.
Downloadable: Time Discounting, Education and Growth




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