The Language of Economic Growth: A New Measure of Linguistic Heterogeneity

Abstract

Conventional wisdom holds that languages, as ethnic markers, build communities with shared preferences and strong social networks. Consequently, ethnolinguistic homogeneity can facilitate growth. This article challenges this conception of language as a cultural marker. It argues that language is also a practical vehicle of communication; people can be multilingual, and second languages can be learned. Hence language boundaries are neither (1) congruent with ethnic boundaries nor (2) static. If true, the purported advantages of ethnolinguistic homogeneity should also be evident in countries with large populations of non-native speakers conversant in official languages. The study tests this hypothesis using an original cross-national and time-variant measure that captures both mother-tongue speakers and second-language learners. The empirical results are consistent with the understanding of language as an efficiency-enhancing instrument: countries with exogenously high levels of heterogeneity can avoid the 'growth tragedy' 1 by endogenously teaching the official language in schools.