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

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  • M. Keith Chen

    ()
    (School of Management and Cowles Foundation, Yale University)

Abstract

Languages differ 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 effects of language structure are merged with models of intertemporal choice. Empirically, I find 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.

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Bibliographic Info

Paper provided by Cowles Foundation for Research in Economics, Yale University in its series Cowles Foundation Discussion Papers with number 1820.

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Length: 56 pages
Date of creation: Aug 2011
Date of revision: Dec 2012
Handle: RePEc:cwl:cwldpp:1820

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Related research

Keywords: Language; Time preference; Intertemporal choice; Savings behavior; Health; National savings rates; Sapir-Whorf hypothesis;

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References

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  1. Saul Pleeter & John T. Warner, 2001. "The Personal Discount Rate: Evidence from Military Downsizing Programs," American Economic Review, American Economic Association, vol. 91(1), pages 33-53, March.
  2. Börsch-Supan, Axel & Reil-Held, Anette & Rodepeter, Ralf & Schnabel, Reinhold & Winter, Joachim, 2000. "The German Savings Puzzle," Sonderforschungsbereich 504 Publications 01-07, Sonderforschungsbereich 504, Universität Mannheim;Sonderforschungsbereich 504, University of Mannheim.
  3. Robert J. Barro, 2013. "Inflation and Economic Growth," Annals of Economics and Finance, Society for AEF, vol. 14(1), pages 121-144, May.
  4. Martin, Philippe & Rogers, Carol Ann, 1995. "Stabilization Policy, Learning by Doing, and Economic Growth," CEPR Discussion Papers 1130, C.E.P.R. Discussion Papers.
  5. Xavier Sala-i-Martin, 1995. "Transfers, social safety nets and economic growth," Economics Working Papers 139, Department of Economics and Business, Universitat Pompeu Fabra.
  6. Poterba, James M. & Venti, Steven F. & Wise, David A., 1995. "Do 401(k) contributions crowd out other personal saving?," Journal of Public Economics, Elsevier, vol. 58(1), pages 1-32, September.
  7. James M. Poterba, 1994. "Introduction to "International Comparisons of Household Saving"," NBER Chapters, in: International Comparisons of Household Saving, pages 1-10 National Bureau of Economic Research, Inc.
  8. Abigail Barr, 1995. "The missing factor: entrepreneurial networks, enterprises and economic growth in Ghana," CSAE Working Paper Series 1995-11, Centre for the Study of African Economies, University of Oxford.
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Citations

Blog mentions

As found by EconAcademics.org, the blog aggregator for Economics research:
  1. Language and savings
    by Inaki Villanueva in Applied economist on 2012-03-15 13:26:00
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Cited by:
  1. Oded Galor & Ömer Özak, 2014. "The Agricultural Origins of Time Preference," Departmental Working Papers 1407, Southern Methodist University, Department of Economics.
  2. Vasiliki Fouka & Hans-Joachim Voth, 2013. "Reprisals Remembered: German-Greek Conflict and Car Sales during the Euro Crisis," Working Papers 726, Barcelona Graduate School of Economics.
  3. Astghik Mavisakalyan, 2011. "Gender in Language and Gender in Employment," ANU Working Papers in Economics and Econometrics 2011-563, Australian National University, College of Business and Economics, School of Economics.
  4. Silvia Angerer & Daniela Glätzle-Rützler & Philipp Lergetporer & Matthias Sutter, 2014. "Donations, risk attitudes and time preferences: A study on altruism in primary school children," Ifo Working Paper Series Ifo Working Paper No. 177, Ifo Institute for Economic Research at the University of Munich.
  5. Sperlich, Stefan & Uriarte Ayo, José Ramón, 2014. "The Economics of "Why is it so hard to save a threatened Language?"," IKERLANAK Ikerlanak;2014-77, Universidad del País Vasco - Departamento de Fundamentos del Análisis Económico I.
  6. Ingo E. Isphording & Sebastian Otten, 2011. "Linguistic Distance and the Language Fluency of Immigrants," Ruhr Economic Papers, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen 0274, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
  7. M. Keith Chen, 2013. "The Effect of Language on Economic Behavior: Evidence from Savings Rates, Health Behaviors, and Retirement Assets," American Economic Review, American Economic Association, vol. 103(2), pages 690-731, April.

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