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Productivity, Social Interaction and Communication

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  • Gilles Saint-Paul

Abstract

In this paper, we study how, depending on the sociological and technological characteristics of the economy, a "unified" or, on the contrary, a stratified way of communicating may émerge. Communication takes place less efficiently in the stratified case, because people who spend différent languages cannot communicate with each other. The main results of the paper are as follows. First, the equilibrium degree of literacy is suboptimally low because of the "thin market externality" associated with the language. Second, social stratification generates linguistic stratification and the associated output and welfare losses due to communication failure. Third, because of the thin market externality, there is too much stratification. Fourth, specialized technologies are less vulnerable to stratification than flexible ones, or, equivalently, increased fiexibility may have adverse effects on output when society is stratified.
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  • Gilles Saint-Paul, 2002. "Productivity, Social Interaction and Communication," Recherches économiques de Louvain, De Boeck Université, vol. 68(1), pages 111-123.
    • Handle: RePEc:cai:reldbu:rel_681_0111
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    References listed on IDEAS

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    2. Chiswick, Barry R & Miller, Paul M, 1996. "Ethnic Networks and Language Proficiency among Immigrants," Journal of Population Economics, Springer;European Society for Population Economics, vol. 9(1), pages 19-35, February.
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    7. Edward P. Lazear, 1999. "Culture and Language," Journal of Political Economy, University of Chicago Press, vol. 107(S6), pages 95-126, December.
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    Cited by:

    1. Pieter Serneels, 2002. "Explaining Non-Negative Duration Dependence Among the Unemployed," CSAE Working Paper Series 2002-13, Centre for the Study of African Economies, University of Oxford.

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    More about this item

    JEL classification:

    • D6 - Microeconomics - - Welfare Economics
    • J15 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Minorities, Races, Indigenous Peoples, and Immigrants; Non-labor Discrimination
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • Z13 - Other Special Topics - - Cultural Economics - - - Economic Sociology; Economic Anthropology; Language; Social and Economic Stratification

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