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One Nation, One Language? Domestic Language Diversity, Trade and Welfare

Author

Listed:
  • Gurevich, Tamara

    () (U.S. International Trade Commission)

  • Herman , Peter

    () (U.S. International Trade Commission)

  • Toubal, Farid

    () (University of Paris-Dauphin)

  • Yotov, Yoto

    () (School of Economics)

Abstract

Using new data on linguistic diversity across and within countries, we examine novel channels though which language affects trade patterns and economic welfare. We find that linguistic similarity within a country accounts for about 10 percent of estimated `home bias', demonstrating the importance of shared languages for domestic integration. To highlight the general equilibrium implications of domestic language proximity, we simulate the repeal of Quebec's Bill 101, which made French an official language in Canada and established fundamental language rights for French-speakers. The analysis demonstrates that domestic language diversity has significant implications for Canada's welfare but also sizable economic consequences that stretch far beyond its borders.

Suggested Citation

  • Gurevich, Tamara & Herman , Peter & Toubal, Farid & Yotov, Yoto, 2021. "One Nation, One Language? Domestic Language Diversity, Trade and Welfare," School of Economics Working Paper Series 2021-8, LeBow College of Business, Drexel University.
  • Handle: RePEc:ris:drxlwp:2021_008
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    References listed on IDEAS

    as
    1. Victor Ginsburgh & Shlomo Weber, 2016. "The Palgrave Handbook of Economics and Language," ULB Institutional Repository 2013/277408, ULB -- Universite Libre de Bruxelles.
    2. Baier, Scott L. & Yotov, Yoto V. & Zylkin, Thomas, 2019. "On the widely differing effects of free trade agreements: Lessons from twenty years of trade integration," Journal of International Economics, Elsevier, vol. 116(C), pages 206-226.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Common language; ethno-linguistic diversity; identity; international trade; domestic trade; domestic trade costs; welfare;
    All these keywords.

    JEL classification:

    • C54 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Quantitative Policy Modeling
    • D60 - Microeconomics - - Welfare Economics - - - General
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F19 - International Economics - - Trade - - - Other
    • Z13 - Other Special Topics - - Cultural Economics - - - Economic Sociology; Economic Anthropology; Language; Social and Economic Stratification

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