How language may influence our saving

[BarkyardBQ]

Keith Chen, a behavioral economist examines how languages that think about tense, specifically the future (or not) may determine how an individual, family, or entire country think about saving. Languages that think in past, present and future tense see the future as being distant, and tend to save less; while languages that see the future as less distant save more. We have this problem in America now, people see retirement has a long way off and therefore it's 'ok' to put off saving for retirement. We don't seem to understand or accept the benefits of delayed gratification.

http://www.anderson.ucla.edu/faculty/keith.chen/papers/LanguageWorkingPaper.pdf
https://www.ted.com/talks/keith_chen_could_your_language_affect_your_ability_to_save_money
http://www.scientificamerican.com/article/how-language-effects-your-wealth-health/

via Scientific American:

People’s savings rates are affected by various factors such as their income, education level, age, religious affiliation, their countries’ legal systems, and their cultural values. After those factors were accounted for, the effect of language on people’s savings rates turned out to be big. Speaking a language that has obligatory future markers, such as English, makes people 30 percent less likely to save money for the future. This effect is as large as the effect of unemployment. Being unemployed decreases the likelihood of saving by about 30 percent as well.

Similar analyses showed that speaking a language that does not have obligatory future markers, such as Mandarin, makes people accumulate more retirement assets, smoke less, exercise more, and generally be healthier in older age. Countries’ national savings rates are also affected by language. Having a larger proportion of people speaking languages that does not have obligatory future markers makes national savings rates higher.

Conclusion to Working Paper:

Overall, my findings are largely consistent with the hypothesis that languages with obligatory future-time reference lead their speakers to engage in less future-oriented behavior. On savings, the evidence is consistent on multiple levels: at an individual’s propensity to save, to long-run effects on retirement wealth, and in national savings rates. These findings extend to health behaviors ranging from smoking to condom use, as well as to measures of long-run health. All of these results survive after comparing only individuals who are identical in numerous ways and were born and raised in the same country.
One important issue in interpreting these results is the possibility that language is not causing but rather reflecting deeper differences that drive savings behavior. These available data provide preliminary evidence that much of the measured effects I find are causal, for several reasons that I have outlined in the paper. Mainly, self-reported measures of savings as a cultural value appear to drive savings behavior, yet are completely uncorrelated with the effect of language on savings. That is to say, while both language and cultural values appear to drive savings behavior, these measured effects do not appear to interact with each other in a way you would expect if they were both markers of some common causal factor.

In addition, differences in the use of FTR do not seem to correspond to cognitive or develop- mental differences in the acquisition of language. This suggests that the effect of language that I measure occurs through a channel that is independent of either cultural or cognitive differences between linguistic groups.
Nevertheless, the possibility that language acts only as a powerful marker of some deeper driver of intertemporal preferences cannot be completely ruled out. This possibility is intriguing in itself, as the variation in future-time reference that identifies my regressions is very old. In Europe for example, most Germanic and Finno-Ugric languages have been futureless for hundreds of years. Indeed, Dahl (2000) suggests that proto-Germanic was futureless at least two thousand years ago.

[TheRabbit]

Thanks for the share! As an Applied Linguistics graf student and trilingual speaker of English, Spanish, and Mandarin, I find this very interesting. I'm going to have to read the whole article because usually research that discusses linguistic differences and behavioral differences is highly criticized in the field.

[franklin w. dixon]

Thanks for the share! As an Applied Linguistics graf student and trilingual speaker of English, Spanish, and Mandarin, I find this very interesting. I'm going to have to read the whole article because usually research that discusses linguistic differences and behavioral differences is highly criticized in the field.

For good reason.

[StockBeard]

Didn't read the paper, but I am wondering: How can they possibly distinguish language from all the other cultural background elements (taxes in the country, education, culture...) and still get statistically significant results?

As in, I can see how we can verify that "people in China save more than people in the US", but not how "people who speak mandarin save more than people who speak English, *because* they speak Mandarin". I glanced at the paper, but would love if someone could dumb this down for me...

Edit: also wondering what that does for people who speak several languages :)

[Retired To Win]

... I can see how we can verify that "people in China save more than people in the US", but not how "people who speak mandarin save more than people who speak English... Also wondering what that does for people who speak several languages :)

And what about people who have emigrated to a new country and primarily speak -- and think -- in their "new language"?  And what about the people -- of which there have to be droves -- who speak/think English out "in the world" but speak/think their native language at home with their families?

[franklin w. dixon]

Didn't read the paper, but I am wondering: How can they possibly distinguish language from all the other cultural background elements (taxes in the country, education, culture...) and still get statistically significant results?

As in, I can see how we can verify that "people in China save more than people in the US", but not how "people who speak mandarin save more than people who speak English, *because* they speak Mandarin". I glanced at the paper, but would love if someone could dumb this down for me...

Edit: also wondering what that does for people who speak several languages :)

They cannot, which is why deducing causal relationships between linguistic idiosyncrasies and behavior is a big ole load of ascientific reckons.

There are a handful of interesting near-exceptions; the most illustrative example I can think of is Guugu Yimithirr, in which relative locations are usually described according to cardinal directions (like "the coffee cup is north of the kettle" rather than "the coffee cup is behind the kettle"). As a result of this quirk people have to know their cardinal orientation at all times, even indoors, in order to speak "normally," and seem to have an intuitive grasp of orientation. But even that extreme example can hardly be said to cause any special behaviors (besides maybe not getting lost very easily), and it's disputed for reasons akin to the confounding variables you describe: most native speakers of the language spent most of their life outdoors, where cardinal orientation matters and is obvious from the position of the sun. It's impossible to run a counterfactual experiment to see how Guugu Yimithirr speakers would talk if they lived in cities for a few generations.