DP13002 The Economics of Language

Author(s): Victor Ginsburgh, Shlomo Weber
Publication Date: June 2018
Keyword(s): Diversity Indices, Economic Behavior, Educational Linguistic Policies, Languages, Linguistic Distances, Welfare
JEL(s): F13, F22, G11, H11, J15, J3, O10, Z13, Z18
Programme Areas: Public Economics
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=13002

The paper brings together methodological, theoretical, and empirical analysis into the single framework of linguistic diversity. It reflects both historical and contemporary research by economists and other social scientists on the impact of language on economic outcomes and public policies. We examine whether and how language influences human thinking (including emotions) and behavior, analyze the effects of linguistic distances on trade, migrations, financial markets, language learning and its returns. The quantitative foundations of linguistic diversity, which rely on group identification, linguistic distances as well as fractionalization, polarization and disenfranchisement indices are discussed in terms of their empirical challenges and uses. We conclude with an analysis of linguistic policies and shifts of languages and examine their welfare effects and the trade-offs between the development of labor markets and the social costs that they generate in various countries.