Early life conditions, time preferences, and savings

Adamopoulou, Effrosyni ; Colombo, Mattia ; Triviza, Eleftheria

PDF
dp24052.pdf - Published
Download (2MB)

URN:	urn:nbn:de:bsz:180-madoc-685077
Document Type:	Working paper
Year of publication:	2024
The title of a journal, publication series:	ZEW Discussion Papers
Volume:	24-052
Place of publication:	Mannheim
Publication language:	English
Institution:	Business School > ABWL u. Corporate Finance (Maug 2006-) School of Law and Economics > Sonstige - Fakultät für Rechtswissenschaft und Volkswirtschaftslehre Sonstige Einrichtungen > ZEW - Leibniz-Zentrum für Europäische Wirtschaftsforschung
MADOC publication series:	Veröffentlichungen des ZEW (Leibniz-Zentrum für Europäische Wirtschaftsforschung) > ZEW Discussion Papers
Subject:	330 Economics
Classification:	JEL: D14 , N44,
Keywords (English):	patience , precautionary savings , scarcity , early life experiences
Abstract:	This study examines how early-life exposure to food scarcity influences individuals’ long-term time preferences and savings behavior. To this end, we analyze hand-collected historical data on livestock availability during World War II at the provincial level, alongside detailed survey data on elicited time preferences and household savings. By leveraging differences across cohorts and provinces in a difference-in-differences framework, we find that individuals who experienced more severe scarcity during early childhood develop higher levels of patience later in life and tend to hold more (precautionary) savings, conditional on income. Our findings suggest that exposure to protein scarcity during the first years of life and in utero can instigate a lasting increase in prudent behavior in the form of a coping mechanism.