This article has been reviewed according to Science X's editorial process and policies. Editors have highlighted the following attributes while ensuring the content's credibility: Some teenagers are happy to wait for a bigger reward tomorrow rather than cash in today. Others would rather take the sure thing now—or gamble on a risky, high-payoff bet.
According to a new study, these everyday differences in patience and risk appetite are more than personality quirks. They help determine which program a high school graduate chooses—and, with it, the shape of their working life for decades to come. The international study, led by researchers at CEBI, was published in the journal Proceedings of the National Academy of Sciences.
"Economic theory has long predicted that how patient you are, and how much risk you're willing to take, should shape how you invest in your own education," says Kristoffer B. Hvidberg, associate professor at Aarhus University and CEBI. "What's new is that we can now show this directly, using real choices in experiments involving real money, linked to data from the Ministry of Higher Education and Science on which programs people actually apply for." To measure patience and risk appetite, the researchers didn't rely on a personality questionnaire.
Instead, they used responses from more than 3,000 18- and 19-year-olds across Denmark who were randomly invited to take part in an incentivized online experiment in 2018—at exactly the age when they were approaching, but had not yet made, their choice of higher education. Just over a third logged on and took part. In the experiment, participants made a series of real financial choices: In one task, they decided how much of a cash amount to save now in return for a larger payout later; in another, they decided how much to invest in a risky gamble versus keeping a safe, certain amount.
One of each person's choices was picked at random and paid out via MobilePay, the Danish mobile payment app, with an average payout of around DKK 250. "This kind of incentivized, large-scale experiment linked to real educational choices hasn't been done before. It's what lets us move beyond correlations in survey data and get a genuine read on how patient or risk-tolerant someone is," says Søren Leth-Petersen, professor at the Department of Economics and CEBI.
Because Denmark keeps detailed administrative registers, the researchers could then link each young person's measured patience and risk appetite to the higher education program they went on to apply for through the national admissions system, and to detailed data on how long that program takes and what its graduates typically earn. The final analysis covers more than 3,000 young people who applied to one of 76 different programs. The results follow a clear pattern.
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