Brian Cadena - Mitigating the negative implications of impatience

Brian Cadena, Associate Professor, Department of Economics at University of Colorado Boulder discusses what policymakers can do to mitigate negative implications of impatience.

The easiest thing would be to invest in early childhood education. There’s some strong evidence that those investments really young in life, can give people the skills to delay gratifications throughout the rest of their working lives. That’s probably the easiest and most uncontroversial thing that policymakers could do.

Later in life though, there’s some evidence that people’s brains have settled into their patterns of thinking and it can be hard to change people’s level of impatience and the way that they approach those kinds of decisions. For them some more direct policies might be appropriate. An example could be something like changing the age of compulsory schooling, requiring people to complete high school for example. Other examples include things like completion grants.

These are pretty popular in a US context, more and more colleges and universities are experimenting with the idea of giving students money that’s contingent on them finishing college in the required about of time. So, they might find people who have completed three years of their four-year degree and say here’s some extra money, let’s make it easy for you, like you can stop working, instead just focus on your studies, get this done this year.

That sort of thing can really help people make it through that final year and follow through on that commitment to actually finish that degree. You could also think about giving people extra money when they’re unemployed, that’s contingent on continuing that job search because there’s also evidence that job search is really responsive to this impatience. It’s a place where people keep meaning to search for that new better job but end up not doing so, and so incentivizing that job search is another thing that policy makers could do.