Discussion paper

DP13002 The Economics of Language

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.


Weber, S and V Ginsburgh (2018), ‘DP13002 The Economics of Language‘, CEPR Discussion Paper No. 13002. CEPR Press, Paris & London. https://cepr.org/publications/dp13002