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The economics of language

This article discusses the relationship between being multilingual and acquiring economic success.
© University of Groningen

You have looked for information on how companies deal with diversity and multilingualism and you have heard the experience of a multilingual family on this. It is now time to listen to what research has found on the relationship between being multilingual and acquiring economic success.

The content of this article step is based on ‘The economics of language: brief literature review’ written by François Grin (2002) and on two empirical studies investigating the relation between multilingualism and economic advantages of multilingual speakers.

The literature about the economics of language can be broken down in four main categories:

  1. Language and labour income: A first generation of studies looks at language as an ethnic attribute. One’s mother tongue ascribes a person to a particular group and this language-based ascription may have an effect on that person’s socio-economic status and his or her earnings. This is for example applied for immigrants in the US by comparison with the ‘white’ workforce, anglophones and francophones in Canada, between ‘Gastarbeiter” and native Germans in Germany and between three language communities in Switzerland.
  2. Language dynamics: A second generation of studies focuses on language as a source of economic advantage. Language skills can be seen as an area in which individuals and societies can profitably invest. You will find examples of this in the studies summarised below.
  3. Language and economic activity: A third generation of studies looks at both dimensions at the same time. Languages are not only seen as elements of identity or potentially valuable skills, but are more a set of linguistic attributes which together influence a person’s socio-economic status. Some work has looked into language use in advertising and consumer relations. Studies have shown, for example, that there is a general preference by bilingual customers in Catalonia or Quebéc for being offered goods and services in their own language (even if they perfectly understand the other, dominant, language).
  4. The economics of language policy: Economics can help to look at different choices about language policy in terms of advantages and drawbacks. Society is confronted with choices regarding language. This line of work identifies the main sources of benefits and costs, from the perspective of individuals and society. As education is the most important channel of government intervention in the sphere of language, education economics provides an important input in such work.

What does research say about the value of languages for economics?

College graduate students College graduate students – By Kit from Pittsburgh, USA (Grads Absorb the News) CC BY 2.0 , via Wikimedia Commons

You will now read two summaries of studies conducted on the topic of the economics of language.

Study one:

Lucrecia Santibañez and Estela Zárate using the U.S. Department of Education national data set (Educational Longitudinal Survey, 2002) tracked students from 10th grade through high school graduation and the beginning of college or other postsecondary situation. They examined immigrants, comparing those exposed to a non-English home language who achieved biliteracy (“high‐use bilinguals”) against those with weaker bilingualism /biliteracy, and those who were English only. Their sample looked at bothe Chinese‐speaking and Spanish‐speaking students. They found that all the high-use, or balanced bilinguals (biliterates), went to college at higher rates than those who had weaker bilingual skills or none at all. Furthermore, they discovered that among Spanish speakers, those biliterates were more likely to go to a 4-year college rather than a 2‐year college. Given that Latino students have the lowest college completion rate of any subgroup — in large part because they overwhelmingly attend 2-year colleges — these findings are of enormous importance. College graduates earn considerably more than those who only graduate from high school, so their bilingualism contributes indirectly to much higher earnings.

Study two:

Orhan Agirdag looked at the issue from another perspective. He wanted to know to what extent there is an earnings penalty to losing one’s primary language. Using another U.S. Department of Education national dataset (Educational Longitudinal Study, 1988/2000) and the Children of Immigrants Longitudinal Study (CILS 1991/2003), Agirdag asked whether there were differences in earnings between balanced bilinguals and those children of immigrants who had “assimilated” such that they were no longer strong bilinguals or biliterates. Agirdag reports that the children of immigrants who had lost their primary language skills experienced an annual earnings penalty of between $2,000 and $3,200. Later, Agirdag conducted the same analysis with newer U.S. Department of Education data, the ELS (the same data used by Santibañez and Zárate) and established that the wage penalty was even greater for this newer generation (around $5,000).

In conclusion:

  • Being a high-use bilingual is related to going to college at higher rates
  • Learning to read and write in several languages is connected to staying longer at college
  • In the long run, loosing your family language results in penalties for your annual earnings (up to $5,000).

In the following step, you will reflect on what you have learned about the relationship between economic earning and maintaining or investing in multilingualism.

Sources: Agirdag, O.(2014). The literal cost of language assimilation for the children of immigration: The effects of bilingualism on labor market outcomes. In R. M. Callahan & P. C. Gándara (Eds.), The bilingual advantage, language, literacy, and the U.S. labor market. (pp.160–181). Bristol, England: Multilingual Matters.

Grin, F. (2012). Using language economics and education economics in language education policy. Language Policy Division. Strasbourg: Council of Europe. (

Santibañez, L., & Zárate, M. E. (2014). Bilinguals in the U.S. and college enrolment. In R. M. Callahan & P. C. Gándara(Eds.), The bilingual advantage: Language, literacy, and the labor market. (pp.211–233). Bristol, England: Multilingual Matters.

© University of Groningen
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