Pension Participation: Do Parents Transmit Time Preference?

A wide range of economic and health behaviors are influenced by individuals’ attitudes toward the future—including investments in human capital, health capital and financial capital. Intergenerational correlations in such behaviors suggest an important role the family may play in transmitting time preferences to children. This article presents a model of parental investment in future-oriented capital, where parents shape their children’s time preference rates. The research identifies a dual role for a parent’s time preference rate in the process of shaping the offspring’s attitude toward the future, and discusses paths through which parents may socialize children to be patient. The model’s implications are studied by investigating the parent–child correlation in pension participation using data from the Panel Study of Income Dynamics