In Box

Tomorrow, We Save

Language offers a clue to countries' economic behavior.

Why do Germans revere austerity and fiscal discipline, while Greeks spend like there's no tomorrow? Why can't the United States convince China to consume more and save less? Yale University economist Keith Chen thinks part of the answer may be in language -- particularly in how different languages treat time.

Languages differ in the degree to which they distinguish future events from the present. For example, in what linguists call strong future-time reference (FTR) languages like English, a speaker says, "It will rain tomorrow." In a weak-FTR language like German, one simply says "Morgen regnet es"-- literally, "Tomorrow, it rains." Mandarin Chinese has similarly weak time construction. Strong-FTR speakers have to do a little more verbal work to make it clear they're talking about the future. Chen, who grew up in a Chinese-speaking household in the United States, thinks this subtle difference actually changes the way speakers of different languages conceive of time -- which affects how people act in the present.

Extensive psychological research shows that linguistic differences actually do affect the perception of external phenomena. A 2007 study in the National Academy of Sciences journal noted that Russian speakers, who have separate words for "blue" (siniy) and "light blue" (goluboy), have a better ability to distinguish between similar shades of the color than English speakers. When it comes to gauging time, Chen's hypothesis is that weak-FTR speakers see the future as less distant and therefore engage in fewer behaviors with negative future consequences."Every time your language forces you to specify that you're talking about the future, it's a little nudge that this is something different than the present," Chen says. "It's something that you do to yourself thousands of times a day."

Weak-FTR languages include German, Mandarin, Japanese, and the Scandinavian languages, while English, Greek, Russian, and Spanish are strong-FTR. In a recent paper, Chen compared European families of similar education, income, and religion and found that speakers of weak-FTR languages on average save more for retirement, smoke less, and are less likely to be obese. "Every one of the countries that we think of as an outlier in terms of savings is also an outlier in terms of how they speak about the future," Chen says.

So it's not just that the Chinese and Northern Europeans are better at planning for the future: They're already living -- or at least speaking -- in it.

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In Box

The Renminbi Blues

Why economic growth hasn't made the Chinese any happier.

Imagine that in 20 years you're four times richer than you are today. Given that U.S. incomes have increased only slightly since the early 1990s, you'd probably be pretty happy, right? Not quite. The truth is that happiness is relative: It largely depends not on your own good fortune, but on how much richer people around you are.

Economist Richard Easterlin, now at the University of Southern California, has been trying to crack the happiness code for decades. In the 1970s, he developed the theory that has become known as the "Easterlin paradox," which argues that although people with higher incomes tend to report higher levels of life satisfaction, countries don't become generally more satisfied as they become richer. Now, a group of economists led by Easterlin has tested his hypothesis on the most dramatic example of economic development in recent history: China's post-liberalization boom. Both per capita GDP and average consumption in China increased at least fourfold in real dollar terms between 1990 and 2009. Surely, then, Easterlin asks, the Chinese must be feeling at least a little better about life?

Nope. Looking at a variety of data from the World Values Survey, Pew, Gallup, and others, Easterlin and his team found that life satisfaction in China actually declined from 1990 through the mid-2000s, according to their recent paper in the journal of the National Academy of Sciences. It has since rebounded a bit but still appears slightly down from 1990.

This trend mirrors the experience of the post-communist countries in Eastern Europe, but Easterlin says that even he was surprised to see the Chinese parallel. "The results show that cultural factors are overridden by economic development," he says. And the doldrums may be permanent. "None of these countries are likely to exceed pre-transition levels" of happiness, he warns. Easterlin thinks that China's yawning inequality is likely behind the slow growth in life satisfaction. "People make comparisons of their living levels with those around them," he says. Never mind that tens of millions of Chinese families have progressed from owning bikes to cars -- if the guy down the block is driving a Lamborghini, it's likely to leave you wanting. It seems like true happiness is still all about keeping up with the Jiangs next door.

Illustration by Bob Staake for FP