Keith Chen: Could Your Language Affect Your Ability To Save Money? Behavioral economist Keith Chen says languages that don't have a future tense strongly correlate with higher savings.
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Could Your Language Affect Your Ability To Save Money?

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Could Your Language Affect Your Ability To Save Money?

Could Your Language Affect Your Ability To Save Money?

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So, Keith, you've worked on some of this with Laurie?

KEITH CHEN: Yeah. We've done a lot of work together on capuchins and money.

RAZ: This is Keith Chen. He's a friend of Laurie's from college. And...

CHEN: I'm an associate professor of economics here at UCLA in the Anderson School.

RAZ: But one of the things Keith noticed working with those monkeys...

CHEN: ...Is that it's very, very difficult to get them to save for the future.

RAZ: And it's hard to get certain people to save for the future, too. But only certain people.

CHEN: So, you know, the recent financial crisis really kind of hit home with this, like, really, really stark fact, which is there are countries around the world that just seem similar on so many dimensions, but which display radically different savings behavior.

RAZ: And Keith is talking about rich countries - OECD countries with stable governments, stable economies, good education systems, but whose citizens do not save money in the same way.

CHEN: So there can be, in any given year, an OECD country which is saving over 25 percent of its GDP, 40 percent of its GDP.

RAZ: So, like, Japan or China or the Scandinavian countries. While there are other ones...

CHEN: ...You know, like the United States, for example, that barely cracks 10 percent.

RAZ: So the issue for Keith and for a lot of economists who've been looking at this issue for decades is why.

CHEN: Why do we see such radically different savings behavior across countries?

RAZ: Keith was exploring just that question when he came up with kind of a crazy idea that directly connects the way you save money with the language you speak. We'll explain in a moment. I'm Guy Raz. And this is the TED Radio Hour from NPR.


RAZ: It's the TED Radio Hour from NPR. I'm Guy Raz. Our show today, the money paradox. Ideas around why money has so much influence on our behavior. So a moment ago, we met Keith Chen. He's an economist.

CHEN: Yeah. So what I am, more specifically, is a behavioral economist, and most importantly, one of the primary things I study is how people make decisions about really, really far-off events. So how is it that I bring myself to save for retirement even if that's 35 years away?

RAZ: OK, so for a long time, economists have grappled with a mystery - why are, say Americans or Greeks or the British, so bad at saving money compared with the Chinese or the Fins?

CHEN: So why is it that the Chinese, the Scandinavians and the Japanese save so much? And what I started to notice as an economist was that all of these countries, which are outliers to an economist are also outliers to linguists when they think about languages that don't kind of strictly grammaticalize the difference between the future and the present. And so it started to click in my mind that, wow, you know, can this just be a coincidence or is there a deeper pattern here?

RAZ: Here's how Keith explained it from the TED stage.


CHEN: So, for example, if I'm speaking in English, I have to speak grammatically differently if I'm talking about passed rain - it rained yesterday, current rain - it is raining now or future rain - it will rain tomorrow. Notice that English requires a lot more information with respect to the timing of events. Why? Because I have to consider that, and I have to modify what I'm saying to say it will rain or it's going to rain.

It's simply not permissible in English to say it rained tomorrow. In contrast to that, that's almost exactly what you would say in Chinese. A Chinese speaker can basically say something that sounds very strange to an English speaker's ears. They can say yesterday it rained, now it rained, tomorrow it rained. In some deep sense, Chinese doesn't divide up the time spectrum in the same way that English forces us to constantly do in order to speak correctly.

RAZ: And to linguists, this means that Chinese is a futureless language. English, on the other hand, is a futured language, which means that time constantly intrudes into our speech in all kinds of ways.

CHEN: So, for example, if you asked me, you know, Keith, how long can we keep speaking...

RAZ: How long?

CHEN: ...So, you know, we can keep going for hours. But, you know, I have some graduate students back - waiting for me back in my office. It's perfectly natural, if we were speaking Mandarin Chinese with each other, for me to say, you know, I'm sorry, we kind of have to wrap this up. I meet with student in an hour. Like, it's - that doesn't sound strange at all to a Chinese speaker's ear.

RAZ: And that led Keith to an intriguing hypothesis - could how you speak about time affect the way you think about money?


CHEN: You speak English, a futured language, and what that means is that every time you discuss the future or any kind of a future event, grammatically, you're forced to cleave that from the present and treat it as if it's something viscerally different. Now suppose that that visceral difference makes you suddenly disassociate the future from the present every time you speak. If that's true, and it makes the future feel like something more distant and more different from the present, that's going to make it harder to save.

If, on the other hand, you speak a futureless language, the present and the future, you speak about them identically. If that suddenly nudges you to feel about them identically, that's going to make it easier to save.

RAZ: OK, so to test this theory out, Keith gathered up millions of data points - data from health and lifestyle surveys taken from around the world. And then he controlled for religion, sex and family size.

CHEN: Imagine two families that have exactly the same number of children, the heads of households are exactly the same age, they've gotten exactly the same number of years of education, have the same type of college degree. They find themselves in the same income-decile. They live within miles of each other, but the languages that these two families speak at home, one of these languages equates the future and the present, and one of these languages separates the future and the present in their grammar.


CHEN: Now even after all of this granular level of control, do futureless language speakers seem to save more? Yes. Futureless language speakers, even after this level of control, are 30 percent more likely to report having saved in any given year. Does this have cumulative effects? Yes. By the time they retire, futureless language speakers, holding constant their income, are going to retire with 25 percent more in savings.

Can we push this data even further? Yes. Think about smoking, for example. Smoking is, in some deep sense, negative savings, right. If savings is current pain in exchange for future pleasure, smoking is just the opposite. It's current pleasure in exchange for future pain. What we should expect then is the opposite effect. And that's exactly what we find. Futureless-language speakers are 20 to 24 percent less likely to be smoking at any given in time compared to identical families. And they're going to be 13 to 70 percent less likely to be obese by the time they retire.

And they're going to report being 21 percent more likely to have used a condom in their last sexual encounter. I could go on and on with the list of differences that you can find. It's almost impossible not to find a savings behavior for which this strong effect isn't present.

RAZ: That is insane. I mean, that is crazy to me that the language somebody speaks can determine...

CHEN: Yeah. But, I mean, when you think about it, it can make perfect sense. Like, it's a really hard problem to think about. You know, money issues are difficult. Like, you know, do I save in a Roth? Do I save in a standard 401(k)? Like, how do I - how much should I save? You know, should I save in stocks? Should I save in bonds?

RAZ: It just sounds like way out there, like, way out into the future.

CHEN: Exactly. It's far away. Its abstract. It's difficult for you to visualize exactly why you're saving now.

RAZ: So, like, what could people who have, you know, futured language, like, how do you fix it? Like, how do you get them to save better if, like, baked into the language is this problem?

CHEN: Yeah. So my ultimate goal with a lot of this research is to really uncover the subtle things which nudge us to thinking about problems in one way or the other. And there's actually some fascinating work by a psychologist at the University of Pennsylvania, who - he got a company to do some interesting things to people's 401(k)forms. So you go into to work one day, and they ask you how much of your salary would you like set aside for your retirement account?

And what this psychologist did was in one condition, he put your picture from the kind of corporate Facebook in the upper, right-hand side of the form. That he did to half of the people. To the other half of the people, he put an aged version of your picture, a digitally aged version of your picture in the upper, right-hand side of the form. And what he found is that people who had to stare at their future selves saved a lot more than people who were staring at their current selves while making this decision.

RAZ: Wow. That's amazing.

CHEN: So I would certainly never recommend that we abandon English, for example, for Finnish or something like that. But I think that becoming more aware and understanding exactly why it is that we allow kind of subtle nudges of our language to kind of affect our decision-making, in the end, will result in tools that'll help us kind of be better stewards of our own futures.

RAZ: Keith Chen. A lot of economists believe that his groundbreaking research could change the way we think about savings. Check out his full talk at

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