About two weeks ago, I informed the office accountant that I would be taking four vacation days for my trip to Berlin. The accountant then asked me when I was going to take my other days. Other days?
Sure enough, it turns out that my 5-month internship includes 11 days of paid vacation. This means that I have to use 7 days of vacation in the next 18 or so working days I have left, and now I’m stressed trying to think of how I’m going to use all those days to relax.
Had I known about the vacation days from the beginning, however, I would probably still be in the same predicament as now because I’ve long been the type to delay gratification. In grade school, for instance, my teacher gave me a coupon good for 30 minutes of game time on the computer, but I never used it because I waited so long for the perfect opportunity that I forgot I even had the coupon (I found it years later in an old notebook and began wailing sorrowfully).
Looking at these and many other choices in my life, most economists would probably tell me that I have a very low personal discount rate (I would put it close to zero, in fact). What this means is that when making choices, I seem to value my future self almost identically as I do my current self. The lower the rate, the more I value the future Jeff.
Many, if not most, people have a higher discount rate than I, however, as evidenced by choices they make that clearly favor their present selves over their future selves (e.g. by smoking, skydiving, going into debt). There are even the hyperbolic discounters who evidently hold their future selves in so little regard that they are willing to indulge in small pleasures now at immense cost in the future (e.g. a meth addict or a morbidly obese person who refuses to quench a penchant for fried foods).
Most Germans love the fact that they get so many paid vacation days, but I see it as me being forced to raise my discount rate. Those vacation days aren’t free, after all-- they’re being paid for in the form of a lower salary. In an ideal world I could contract with my employer to take less vacation for more take home pay, which would be money I could use to save or invest for future Jeff. Instead I’m obliged to take several days off and pamper Jeff now at the expense of Jeff ten years on.
I would worry that future Jeff might mind this selfish indulgence, but then again, chubby Jeff at age 12 wasn’t really looking out for me and I don’t hold it against him.