GA Trade July-Aug 2014 - page 16

BringsMost ROI
hat is learning a foreign
language really worth? In
order to find an answer to this
questionMIT economist Albert Saiz
conducted a study to identify the
return on investment (ROI) of
learning a foreign language. The
Barcelona-born economist found
out that the earnings bonus for an
Americanwho learns a foreign
language is about 2%. In other
words, if you speak a second
language, you will receive on
average a 2% higher pay check.
However, Saiz found quite different
premiums for different languages.
Whereas Spanish ranks relatively
low at 1.5%, the German language
appears to be more lucrative at a
higher rate of 3.8%.
Assuming just a 1% real salary
increase per year and a 2% average
real return over 40 years, a 2%
language bonus, as suggested by
Saiz, turns into an extra $67,000
during a life’s worth of work. This
already looks like a substantial sum.
In the case of German, however, the
premium rate is a solid 3,8%, which
translates into a whopping
Mr. Saiz, what was your
personal interest in investigating
the ROI of a foreign language and
how did you conduct that study?
Albert Saiz (AS):
As a European
from Barcelona, speaking three
languages, it was a personal
interest for me to begin with. I
found out that there is a lot of
literature about foreigners learning
English, but there was no research
on the effects of learning a second
language as a native English
speaker in the U.S. Learning a
foreign language is time and
resource consuming. As an econo-
mist I was interested in the eco-
nomic impact of learning a lan-
guage. I basically linked my
personal and my professional
interest in this matter.
We based our research on a com-
prehensive study called “The
Baccalaureate and Beyond Longitu-
dinal Study” (B&B) of the National
Center of Education Statistics,
which examines students’ education
and work experiences after they
complete a bachelor’s degree, with a
special emphasis on the experiences
of new elementary and secondary
teachers. Four years after they
graduated, about 10,000 former
students were asked to fill out a
complex questionnaire consisting of
over 400 questions. We compared
students with conversational
knowledge of a second language
withmonolingual students.
In your study you found
quite different premiums for
different languages: 2.3% for
French and 3.8% for German.
However, in 2011, according to
the U.S. Census Bureau, 1.1
million homes in the U.S. spoke
German as a second language.
French had only marginally more
speakers (1.3million).Why is
learningGerman more lucrative
than learning French?
You have to look at how easy
it is to find that skill in the context
of English-speaking countries. It is
simply supply and demand. In the
U.S. we have Quebec right next
door which provides a large pool of
bilingual French and English
speakers. In our study, we found
that 23% of the people learned
By JanVater, GACC
Interviewwith Albert Saiz,
MIT Economist
GermanAmerican Trade July/Aug 2014
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