39 Pages Posted: 25 Apr 2011
Date Written: December 2006
Language serves two key functions. It enables communication between agents, which allows for the establishment and operation of formal and informal institutions. It also serves a less obvious function, a reassuring quality more closely related to issues linked with trust, social capital, and cultural identification. While research on the role of language as a learning process is widespread, there is no evidence on the role of language as a signal of cultural affinity. I pursue this latter avenue of research and show that subtle language affinity is positively linked with change in earnings when using English-speaking data for cities in the Golden Horseshoe area in Southern Ontario during the period 1991 to 2001. The results are robust to changes in specification, a broad number of empirical tests, and a diverse set of outcome variables.
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