Language diversity, economic growth and per capita income distribution

Abstract This paper proposes a neoclassical growth model that analyzes the key role of language diversity on the long-term trajectory of economies. It considers language as a social technology, which provides workers with linguistic capital enabling them to absorb new knowledge produced locally and abroad. We show that the plurality of languages fragments the global stock of knowledge available to countries, and projects them onto different long-term growth trajectories depending on the structure of their workforce. The study shows that the adoption of a common language for all countries, in addition to their national languages, could be a solution that would promote the long-term convergence of countries' per capita incomes. The conclusions of the theoretical analysis are supported by empirical evidence, which shows, from a sample of 158 countries from 1978 to 2022, that sharing a common official language significantly reduces per capita income disparities across countries after controlling for other important factors such as human capital, investment rates, foreign direct investment, trade, and colonial ties. JEL Classification : E13, E23.