GA Trade July-Aug 2014 - page 16

S P O T L I G H T S
LearningGerman
BringsMost ROI
W
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
$128,000.
GAT:
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.
GAT:
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?
AS:
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
AlbertSaiz,MITEconomist
Interviewwith Albert Saiz,
MIT Economist
16
GermanAmerican Trade July/Aug 2014
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