The Effect of Language on Economic Behavior: Evidence from Savings Rates, Health Behaviors, and Retirement Assets
M. Keith Chen
Yale School of Management; Cowles Foundation
December 12, 2012
Cowles Foundation Discussion Paper No. 1820
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.
Number of Pages in PDF File: 57
Keywords: Language, Time preference, Intertemporal choice, Savings behavior, Health, National savings rates, Sapir-Whorf hypothesis
JEL Classification: D03, D14, D91, E21, I10working papers series
Date posted: August 22, 2011 ; Last revised: December 13, 2012
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