A1 - Tamara Gurevitch
A1 - Peter R. Herman
A1 - Farid Toubal
A1 - Yoto Yotov
TI - One Nation, One Language? Domestic Language Diversity, Trade and Welfare
IS - 2020-15
T3 - Working Papers
KW - Common Language
KW - Ethno-linguistic Diversity
KW - Identity, International Trade
KW - Domestic Trade
KW - Domestic Trade Costs
N2 -
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 Frenchspeakers. 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

ER -