The Role of Time Preferences in Educational Decision Making
The purpose of this paper is to evaluate the role time preferences play in educational decision making. In the presentation, I introduce a dynamic structural life-cycle model in which a forward-looking decision maker makes periodical decisions between continuing schooling and exiting to the labour force. The strategy of the underlying paper is to solve and estimate two versions of this model, one with an exponential, one with a hyperbolic discount factor, and compare subsequent model fit and outcomes from policy simulations. In the presentation, I show the solution to the exponential version and some cautious results of first estimation under some very basic specifications.