It Will Rain Tomorrow: Does Language Affect Retirement Savings?

Tomorrow it rain. It will rain tomorrow. One sounds right, the other doesn’t -- because one is in English and the other a literal translation of the same sentence in Chinese. Both express the message that at one point after 11:59:59pm today, moisture in the clouds will condense into water droplets and be pulled down by gravity. But the English sentence differs by one word -- “will” -- and it is this ‘future-marker’ that behavioural economist Keith Chen hypothesised plays a major role in determining our propensity to save.


One way linguists classify languages is based on the existence of this marker (e.g. “will” or “is going to” in English) and when and how languages temporally require it. Known as the future-time reference (FTR), this classification names languages as either strong FTR (requiring that speakers grammatically signify future events) or weak FTR (future tense is more implied than explicit). Languages like English, Greek, French, and Spanish all fall under the strong FTR, or as Chen calls it, the “futured” cateogry, meaning they require speakers to grammatically mark future events and thus dichotomize conceptions of the present and the future. On the other hand, languages like German, Mandarin, Japanese, and Swedish are categorized as weak FTR or “futureless” languages, where more often than not the future tense in a sentence is implied or conflated with the present tense.


Let’s go back to the example of when it will rain. In English, temporality is reflected in the verb conjugation -- yesterday it rained, today it is raining, tomorrow it will rain. Contrast this with Mandarin Chinese, where such tense conjugation does not exist. In Mandarin, it is simply, zuotian xiayu (“yesterday it rain”), jintian xiayu (“today it rain”), mingtian xiayu (“tomorrow it rain”). Similarly, Japanese splits time into a past and ‘non-past’ -- ame ga furu can mean both “it will rain” and “it rains here regularly”. So, what implications does this have?


Chen began with the idea that because speakers of ‘futured’ languages are forced to grammatically indicate future tense, by association they are also segregating their conception of the future from the past. It will rain tomorrow. Il pleuvra demain. Each time we speak of some future event, it’s reinforcing this notion that the future is a completely distant and separate entity, and that notion is what makes future-beneficial choices harder to make. How does this relate to savings behaviour? If we think of saving as a sacrifice of present utility for future rewards, conceptualizing the future as some faraway realm means we’d have to spend more of our scarcest resource, time, in exchange for these rewards -- and thus our willingness to save decreases.


In comparison, speakers of futureless languages are afforded no such luxury. Linguistically equating the present to the future means these speakers have more uniform impressions of present and future, resulting in a view of the future as ‘closer’ and subsequently making the decision to save an easier one. Present utility for future rewards, but at least those rewards (feel like they will) come quicker.


To visualize this, let’s look at a graph detailing the OECD (Organization of Economic Cooperation and Development) countries and their savings rates as a percentage of their real GDP in 2012. As the most wealthy, industrialized nations in the world whose membership represents a united commitment to democracy and free trade, why are there such glaring disparities between different countries and their savings behaviors? The colored bars below indicate countries who speak a futureless language (those who the future ‘feels closer’ for), and the grey bars indicate the futured language speakers (those who distinctively separate future from present). On average, futureless language speakers saved 9.66% of their respective GDPs, while futured language speakers saved a mere 3.22%. These are compelling statistics, but an even more compelling question is this: what about confounding variables?



Chen set about isolating language as a factor influencing aggregate savings by examining countries with enough linguistic diversity that he could single out identical families who differed only by the language they spoke. Countries like Malaysia, Singapore, Estonia, Belgium, and Burkina Faso were prime selections (e.g. both Mandarin and English as part of Singapore’s four official languages, or both Flemish and French speakers in Belgium). To control for confounding factors, Chen investigated families who shared the same income, education level, marital status, number of children, country of birth and residence, and religion -- and from this selection, he compared these ‘identical’ families in whether they spoke a futured or futureless language and their corresponding savings rates. What he found was a consistent correlation between futureless language speakers and propensity to save; the futureless speakers retire with 25% more in savings than futured speakers.


But this theory has been met with much scepticism, primarily in the linguistics-verse in academia and online. Where does language end and culture start? What’s the relationship between linguistic and cultural diffusion? In other words, how do we know if Japanese people save more because of their language and not because of socio-cultural values in contemporary Japan? Linguists have also noted that Chen’s language-determines-behaviour theory maintains a dangerously Whorfian perspective -- that language plays a major role in shaping its speakers’ world views and choices (now proven to be true only in certain cognitive processes). We also see clear counterexamples to Chen’s conclusion, such as South Korea who as the graph above displays, saved 15% of its 2012 GDP while the Korean language maintains a distinct set of past, present, and future tenses. At the same time however, Chen and his findings have kindled a deeper interest in examining the roots of decision-making and ultimately a greater consciousness of exactly how we think about the future.