Essays on the Economics of Language and Language Policy

Abstract

This thesis concerns the economic dimensions of second language knowledge and acquisition and the economic implications of language policies. The value of the ability to speak and understand a second language depends on the extent to which it enlarges one's communicative sphere which, in turn, depends on the language abilities of others. This implies that second language acquisition decisions are associated with strategic considerations and spillover effects. Consequently, the equilibrium distribution of language skills may not be socially efficient and policy remedies may be called for. The first essay of the thesis investigates the relationship between earnings, second language knowledge and the distribution of language skills in local labour markets in Canada using census data. We estimate the elasticity of local language complementarity in earnings: a parameter that measures the importance of the linguistic environment in the earnings of the individual as well as the importance of language in the economy generally. The second essay addresses the efficiency of second language acquisition decisions in a theoretical model where bilingualism is rewarded with a higher wage for two reasons. First, language skills constitute a form of human capital in the sense that a worker's productivity is positively related to the proportion of the population with whom she shares a language. Second, language skills serve as a signal of productivity to employers. In general, the private and social benefits of bilingualism do not align due to counteracting network and signalling welfare effects. The third essay concerns the role of language policy in improving social outcomes. A tax-subsidy system is considered under various assumptions about the ability of the government or planner to discriminate between individuals and groups. A Pareto improvement is possible if the government can condition the tax-subsidy system on language acquisition costs but not otherwise. The fourth essay considers the optimal provision of public services when individuals' effective consumption of the services depends on their proficiency in the language they are provided in. The planner faces a trade-off between compensating minority language speakers for their lower wages and encouraging their integration by rewarding higher levels of dominant language proficiency.