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IFF-HSG Working Papers – No. 2022-12

What shapes long-termorientation? A small literature using cross-country comparisons and experimental data suggests that culture may be a key determinant in explaining time preferences. We provide novel withincountry evidence on this issue by exploiting the historical and sharp German-French language border within Switzerland. Using tax data of the bilingual canton of Bern, we compare the behavior of individuals that are exposed to a common institutional, political, economic, and geographic environment but differ in their language. We find that compared to their French-speaking fellow citizens, the German speakers save more for retirement, are more likely to pursue continuing education and training, less prone to gambling, and dispose over higher wealth. We find no evidence that our results are driven by religion or that they reflect differences in risk aversion. Although horizontal transmission of culture may play its role, the results indicate that the underlying values and norms are mainly vertically transmitted.

Autor: Manuela Leuenberger

Datum: 4. Februar 2022