The Impatience Gap
They say that patience is a virtue. But Chicago Harris Assistant Professor Benjamin Keys has found that it is much more than that. In a recent paper co-written with University of Colorado economist Brian Cadena, Keys shows that patience is money.
Using data from the National Longitudinal Study of Youth, the authors categorized respondents as “patient” or “impatient/restless” and then looked at the long-term impact of that designation on earnings.
At its widest, the wage gap between patient and impatient individuals amounts to $5,419 (age 38). The authors also identify a sizable aggregate earnings difference between the two groups ($75,000, or 13 percent) by age 45.
“Our findings are consistent with a growing literature, both in economics and psychology, on self-regulation and the role of ‘soft skills’ in young people’s development,” the authors note. The paper, published in American Economic Journal, is not prescriptive. But it does suggest that school programs to improve noncognitive skills and policies that provide incentives for human capital investment would pay off in the long run.
– Mikia Manley