Bilingualism, Language Shift, and Industrialization in Mid-20 th Century India

Economists have linked linguistic heterogeneity to poor economic outcomes, including low economic growth. Linguists have noted that linguistic heterogeneity has been steadily declining for hundreds of years. This paper argues that an important factor behind the consolidation of languages noted by linguists has been the rise of economic activities in which communication is relatively important, such as manufacturing and services. When it is valuable to be able to communicate widely, there is an incentive to become bilingual, particularly for speakers of minority languages. The children of bilinguals may then assimilate to the bigger language, producing consolidation. I use a simple framework to illustrate the relationships between factory employment, bilingualism, and language consolidation. I then explore these relationships empirically using a new panel dataset of Indian districts for 1931 and 1961. My instrumental variables estimates show growth of manufacturing employment strongly encouraged bilingualism in mid-20 th century India, particularly among minority language speakers. Bilingualism among speakers of a language is correlated with its relative decline; instrumental variables estimates show a one standard deviation increase in manufacturing employment decreased linguistic heterogeneity by a third of a standard deviation in Indian districts.