July 2021

IZA DP No. 14539: Economics of Minority Groups: Labour Market Returns and Transmission of Indigenous Languages

Diego de la Fuente Stevens, Panu Pelkonen

This study demonstrates a series of links between minority language skills, their economic return and their transmission across generations. Using a detailed matching procedure and different data sources, we estimate the likelihood of being employed for bilingual versus monolingual men for a large number of Mexican indigenous groups. We find that for indigenous groups, retaining the minority language along with Spanish increases employment opportunities. Furthermore, we show that the languages that are associated with larger labour market benefits are more likely to be passed on from parents to children, controlling for other factors. Overall, this study shows that the continuity of minority languages across generations is linked to concrete economic benefits, labour market specialisation, and insurance value, along with the usual social factors within the family and the community.