1 Department of Economics, Aarhus School of Business, Aarhus BSS, Aarhus University2 Center for Corporate Performance (CCP), Aarhus School of Business, Aarhus BSS, Aarhus University3 Department of Economics and Business Economics, Aarhus BSS, Aarhus University4 Princeton University5 Department of Economics and Business Economics, Aarhus BSS, Aarhus University
Evidence from OECD countries 1985-2006
In addition to economic determinants in line with neoclassical economics and the "human capital investment" framework, a number of non-economic factors are also relevant to explain migration decisions. Beside classic factors such as "love and wars", these include random events such as environment and climate shocks, migrant networks, language and aspects of "cultural distance". In that regard, the more "foreign" or distant the new culture is and the larger the language barrier is, the higher are the costs of an individual to migrate to a particular destination. Fluency in destination country's language and/or widely spoken languages (or ease to quickly learn it) plays a key role in the transfer of human capital from the source country to another country and boosts the immigrant's success at the destination's labor market. We use data on immigration flows and stocks of foreigners in 27 OECD destination countries from 130 source countries for the years 1985-2006. In addition to standard covariates from gravity models, we include a set of indices of language distance to study their association to the observed flows: (1) an index ranging from 0 to 1 that measures the distance between the family of languages of destination an source country; (2) the linguistic proximity measure proposed by Dyen between pairs of languages; (3) a dummy for destinations with a "widely spoken" language as the native language (4) indices on the number, diversity and polarization of languages spoken in both source and destination country, to proxy for the "potential" ease to learn a new language and of adaptation; (5) measures of the diversity of the existing stock and flows of migrants (weighted by languages).