Productivity, Social Interaction and Communication

Gilles Saint-Paul

No 2002022, Discussion Papers (REL - Recherches Economiques de Louvain) from Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES)

Abstract: In this paper, we study how, depending on the sociological and technological characteristics of the economy, a "unified" or, on the contrary, a stratified way of communicating may émerge. Communication takes place less efficiently in the stratified case, because people who spend différent languages cannot communicate with each other. The main results of the paper are as follows. First, the equilibrium degree of literacy is suboptimally low because of the "thin market externality" associated with the language. Second, social stratification generates linguistic stratification and the associated output and welfare losses due to communication failure. Third, because of the thin market externality, there is too much stratification. Fourth, specialized technologies are less vulnerable to stratification than flexible ones, or, equivalently, increased fiexibility may have adverse effects on output when society is stratified.

Keywords: Economies of language; Productivity; Communication (search for similar items in EconPapers)
JEL-codes: D6 J15 J24 O33 Z13 (search for similar items in EconPapers)
Pages: 14
Date: 2002-06-01
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Journal Article: Productivity, Social Interaction and Communication (2002)
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Persistent link: https://EconPapers.repec.org/RePEc:ctl:louvre:2002022

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