Education increases patience: Evidence from a change in a compulsory schooling law

Abstract

I investigate the causal effect of education on time preferences. To deal with the endogeneity of education, I exploit exogenous variation in education imposed by a Turkish school reform that raised compulsory education from five to eight years. I find that education causes individuals to make more patient inter-temporal choices but does not induce them to report being more patient. I also provide evidence that the effect of education on patient inter-temporal choices does not operate through changes in financial well-being.