Promoting or preventing labor migration? Revisiting the role of language

Abstract

Large migration inflows increase the linguistic and cultural diversity of the place of destination, which facilitates the universal interchange of ideas and contributes to economic growth. However, the impact of language on migration is under-researched in developing countries. In this paper, we address this question in the context of China based on micro-level data and find a robust inverted U-shaped relationship between the probability of migration and the dialect distance between one's place of origin and the destination. Our identification strategy carefully addressed the selection bias and investigated different channels through which language affects the decision to migrate through imposing communication barriers, establishing social identity, and enhancing the exchange of skills. The results suggest that migration costs are mainly due to the difficulties of social integration, and the communication costs are small because of the wide use of standard Putonghua in China. In contrast, the benefits of migration increase when individuals move to a more linguistically distant place.