What is a foreign language worth?

18 marzo, 2014 por Felipe Sahagún | Sin comentarios

Language study

Johnson: What is a foreign language worth?

Language study

Johnson: What is a foreign language worth?

JOHNSON is a fan of the Freakonomics books and columns. But this week’s podcast makes me wonder if the team of Stephen Dubner and Steven Levitt aren’t overstretching themselves a bit. “Is learning a foreign language really worth it?”, asks the headline. A reader writes:

My oldest daughter is a college freshman, and not only have I paid for her to study Spanish for the last four or more years — they even do it in grade school now! — but her college is requiring her to study EVEN MORE! What on earth is going on? How did it ever get this far? … Or to put it in economics terms, where is the ROI?

To sum up the podcast’s answers, there are pros and cons to language-learning. The pros are that working in a foreign language can make people make better decisions (research Johnson covered here) and that bilingualism helps with executive function in children and dementia in older people (covered here). The cons: one study finds that the earnings bonus for an American who learns a foreign language is just 2%. If you make $30,000 a year, sniffs Mr Dubner, that’s just $600.

But for the sake of provocation, Mr Dubner seems to have low-balled this. He should know the power of lifetime earnings and compound interest. First, instead of $30,000, assume a university graduate, who in America is likelier to use a foreign language than someone without university. The average starting salary is almost $45,000. Imagine that our graduate saves her “language bonus”. Compound interest is the most powerful force in the universe (a statement dubiously attributed to Einstein, but nonetheless worth committing to memory). Assuming just a 1% real salary increase per year and a 2% average real return over 40 years, a 2% language bonus turns into an extra $67,000 (at 2014 value) in your retirement account. Not bad for a few years of “où est la plume de ma tante?”.

Why do the languages offer such different returns? It has nothing to do with the inherent qualities of Spanish, of course. The obvious answer is the interplay of supply and demand. This chart reckons that Spanish-speakers account for a bit more of world GDP than German-speakers do. But an important factor is economic openness. Germany is a trade powerhouse, so its language will be more economically valuable for an outsider than the language of a relatively more closed economy.

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Relaciones Internacionales – Comunicación Internacional

What is a foreign language worth?

Language study

Johnson: What is a foreign language worth?

Johnson: What is a foreign language worth?

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Language study

Johnson: What is a foreign language worth?

Johnson: What is a foreign language worth?

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