Earnings and linguistic proficiency in a bilingual economy

Abstract

Bilingualism is a widespread phenomenon, yet its economic effects are under researched. Typically studies find that bilingual workers are disadvantaged. Governments often protect minority languages through official promotion of bilingualism, with potential economic consequences. This paper addresses the impact of bilingualism on earnings, using the example of Wales. Results show a positive raw differential of 8 to 10 per cent depending on definition of linguistic proficiency. The use of Welsh in the workplace is not directly productive. Nevertheless language choice and earnings appear to be endogenous. The differential can be entirely explained by a selection effect. This is consistent with the effectiveness of legislation to promote the minority language.