Over the past few weeks, we’ve shared with you how learning French can change your life: last week, we shared with you how learning French can make you measurably smarter, and by helping you get your dream job. Now that you’ve got your sights set on that job, how much money can speaking French really make you?
Today, everything has an opportunity cost. An hour spent learning French is an hour spent not learning something else. So how would one go about calculating the ROI on learning a foreign language?
The Language ‘Bonus’
Fluency in a foreign language can literally make you more money, and even small language bonuses can add up over time. One study finds that the earnings bonus for an American who learns a foreign language is approximately 2%.
You might way, that’s not much: if I make $30,000 a year, that’s just $600. But over the course of your career, that 2 percent language bonus on your salary comes to $25,000 – and that’s if you never get a raise.
With that in mind, The Economist took the idea behind the study further, looking at an average starting salary is almost $45,000. The article states: “Imagine that our graduate saves her “language bonus”. Compound interest is the most powerful force in the universe … 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! »
And, even more impressive, Albert Saiz, the economist from MIT who is responsible for calculating the 2% salary bonus, found quite different premiums for different languages: just 1.5% for Spanish versus 2.3% for French. This translates into big differences in the language account: your Spanish is worth $51,000, while French can get you an additional $77,000 by the end of your career.
Investing, in French
Did you know that learning French just might make you a better investor, and therefore, make you more money in the long-run? A study from the University of Chicago found that speaking in a foreign language can help people to eliminate their tendency toward what is called loss aversion—that is, getting too caught up in the potential investment losses when making choices that could lead to profit later on. As written in Psychological Science, “Even when people fully comprehend the meaning of taboo words, reprimands, expressions of love, and advertising slogans, they react to them less emotionally in a foreign language. This reduction in emotional response might … allow people to rely more on analytic processes when they make decisions.”
The study involved students from the University of Chicago who had grown up speaking one language and had learned a second. In one experiment, they found English speakers were far more likely to take a bet on a long-term gain (in this case, a simple coin toss) when they were presented with a scenario in a foreign language.
When we speak a foreign language, it appears to allow us to provide a useful cognitive distance from automatic processes and our emotional reactions, which allows us to access more analytical thoughts. So, learning French can not only make you more money at work, it may well improve your ability to make wiser (and more profitable!) financial decisions!
That’s all for this week – check back next week for how learning French can improve your emotional intelligence.