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Will Power and Wealth

May 22, 2011 • Behavioral Economics, Households, Labor, Regulation • 107 Views    No Comments

Observing young children, scientists believe they can predict certain adult outcomes. One classic study from the 1960s involved delayed gratification.  A child and a single marshmallow were left in a room. The child could have one marshmallow now or two later.  When interviewed 40 years later, those who resisted temptation as children had better jobs as adults. In New Zealand, a group observed 1037 children from birth to 32. Those with more self-control were more affluent. Also, they were healthier.

The Economic Lesson

If one segment of the population generates excess costs to society in health care, financial dependency and crime, then should schools provide early childhood self-control programs? The New Zealand team says yes if the cost/benefit ratio is good (p. 5).

An Economic Question:  Which variables might you identify if asked to compare the cost and benefit of early childhood programs that develop self-control?

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