Does the Language We Speak Affect Our Attitude to Money?


Northern Europeans are increasingly frustrated with their southern counterparts, claiming that they are more interested in dodging taxes and avoiding work than paying back their debts, and pin the blame on such factors as culture and politics.

But Yale University Professor Keith Chen – who has previously written about how Capuchin monkeys take bigger risks to avoid losses than when seeking gains – says language might have an impact on how responsible people are with their finances and how they plan ahead.

In a new research paper “The effect of language on economic behavior: Evidence from savings rates, health behaviors, and retirement assets” Chen asserts that the way a language handles the future guides the attitudes to taking on debt and saving for a rainy day.

He found that people, whose native tongue has a clear grammatical separation of current and future events – such as English or Greek – are less concerned about their finances than those who speak a language with either no future tense (e.g. Finnish) or weak future tense. For example, in German, future tense can be dropped if the sentence has a clear time reference, they’d say “I go swimming tomorrow”, rather than “I will go swimming tomorrow”.

“Languages with obligatory future-time reference lead their speakers to engage in less future-oriented behavior,” Chen wrote.  “Speakers of strong-FTR (future-time reference) languages save less, hold less retirement wealth, smoke more, are more likely to be obese, and suffer worse longrun health.”

The dominant language in all five countries (Portugal, Ireland, Italy, Greece and Spain) deepest in euro zone debt crisis is one with a strong future-time reference. So, even with the vastly better data, it might be too early to call the crisis over, at least as long as the PIIGS stick to their own language instead of switching to German.

Taken from Reuters: 13.02.12