Time preferences and political regimes: Evidence from reunified Germany
Tim Friehe and
No 306, GLO Discussion Paper Series from Global Labor Organization (GLO)
We use the separation and later reunification of Germany after World War II to show that a political regime shapes time preferences of its residents. Using two identification strategies, we find that former residents of the German Democratic Republic exhibit a significantly less pronounced present bias when compared to former residents of the Fed- eral Republic of Germany, whereas measures of patience are statistically indistinguishable. Interpreting the years spent under the regime as a proxy for treatment intensity yields consistent results. Moreover, we present evidence showing that present bias predicts choices in the domains of health, finance, and education, thereby illustrating lasting repercussions of a regime's in uence on time preferences.
Keywords: Time preferences; Political regime; Germany; Natural experiment; SOEP (search for similar items in EconPapers)
JEL-codes: D02 D12 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-hea and nep-pol
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Journal Article: Time preferences and political regimes: evidence from reunified Germany (2020)
Working Paper: Time preferences and political regimes: Evidence from reunified Germany (2017)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:glodps:306
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