Housing Uncertainty and Childhood Impatience

Abstract

The study demonstrates a direct link between housing uncertainty and children’s time preferences, or patience. We show that students who face housing uncertainties through mortgage foreclosures and eviction learn impatient behavior and are therefore at greater risk of making poor intertemporal choices such as dropping out of school. We find that large household size and the occurrence of an eviction significantly increases the impatience of children as measured by discount rates. At the same time, we find that living in a single-family home with both parents significantly decreases children’s discount rates and thus impatience.