The Effect of Language on Economic Behavior: Evidence from Savings Rates, Health Behaviors, and Retirement Assets

Abstract

Languages di¤er widely in the ways they encode time. I test the hypothesis that languages that grammatically associate the future and the present, foster future-oriented behavior. This prediction arises naturally when well-documented e¤ects of language structure are merged with models of intertemporal choice. Empirically, I …nd that speakers of such languages: save more, retire with more wealth, smoke less, practice safer sex, and are less obese. This holds both across countries and within countries when comparing demographically similar native households. The evidence does not support the most obvious forms of common causation. I discuss implications for theories of intertemporal choice.Comments are welcome at keith.chen@gmail.com. I am indebted to

Language in International Business: A Review and Agenda for Future Research

“…After being virtually discarded in the 1970s, this theory has recently attracted renewed interest from researchers. An emerging body of research examines the Sapir/Whorf hypothesis in relation to consumer behavior (Puntoni et al 2009) and economic activity (Chen 2013). For example, the presence of gender-differentiated pronouns is correlated with attitudes towards gender-based discrimination.…”

“…Malul et al (2016) demonstrate that the linguistic gender marking gap between an MNC's home and host country influences the success of female expatriates. Chen (2013) examines the linguistic structure of future tense, finding that native speakers of languages that grammatically associate the future and the present (e.g., French, English, Czech) are more likely than weak future language speakers to display future-oriented behavior such as greater savings, more wealth at retirement, less smoking, greater safe sex, and less obesity.…”

“…Language-related research in economics developed largely separate from those bodies of literature. This economic stream analyzes semantic structures of national languages such as future-time reference (Chen 2013) or gender marking (Hicks et al 2015) and investigates their impact of economic behavior at the country level. Cross-national economic research mostly relies on linguistic distance, i.e.…”

Reprisals Remembered: German-Greek Conflict and Car Sales During the Euro Crisis

“…Countries that fought numerous wars in the past continue to trade less with each other to the present day, and they engage in less FDI (Guiso et al, 2009). Fertility behavior of immigrants' children is still influenced by their parents' country of origin (Fernández and Fogli, 2006), language characteristics are associated with savings behavior (Chen, 2013), and inherited trust can influence national growth rates (Algan and Cahuc, 2010). Many attitudes persist over long periods: Italian cities that were self-governing in the Middle Ages are richer and more civic-minded today (Guiso et al, 2007), areas of Africa affected by 19C slave-hunts have lower trust in the present (Nunn and Wantchekon, 2011), and German cities that persecuted their Jews during the Black Death were markedly more anti-Semitic in the 1920s and 1930s (Voigtländer and Voth, 2012).…”

Developing Linguistic Diversity Management in Teaching IB: Introduction to this Issue

“…Language is often conflated with culture especially as the language spoken heavily influences cognitive world views and behavior (Kramsch, 1998). For example, speakers of gender intensive languages are more likely to assign household and other tasks by gender and, similarly, speakers of languages that differentiate the future from the present are more likely to accept delayed gratification and undertake future oriented tasks such as savings and investing (Whorf, 1956 andChen 2013). Consequently, when employees of international companies learn a foreign language, they will begin to understand that foreign culture and construct a new identity and a more global mindset.…”