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Language and Industrialization in Mid-20th Century India
David Clingingsmith∗ Department of Economics Case Western Reserve University June 2008

Abstract Bilingualism is an important form of human capital in linguistically diverse developing countries such as India, Indonesia, and Kenya. Expansion of economic activities in which communication is relatively important, such as manufacturing and services, provide an incentive to become bilingual, particularly for speakers of minority languages. I use a simple framework to illustrate the relationships between factory employment, bilingualism, and linguistic diversity. I then explore these relationships empirically using a new panel dataset of Indian districts for 1931 and 1961. Instrumental variables estimates show growth of manufacturing employment strongly encouraged bilingualism in mid-20th century India among minority-language speakers: an additional person became bilingual for every 2.1 manufacturing jobs added. The children of minority-language bilinguals may assimilate to the second language, producing a decline in linguistic heterogeneity. Economists have viewed linguistic heterogeneity as an exogenous determinant of poor economic outcomes, including low economic growth. I find that a one standard deviation increase in manufacturing employment decreased district-level linguistic heterogeneity by a third of a standard deviation, showing linguistic heterogeneity to be endogenous over the medium term.

Email: david.clingingsmith@case.edu. I am grateful for discussions with Leah Platt Boustan, Carola Frydman, Claudia Goldin, Eric Hilt, Lakshmi Iyer, Asim Khwaja, Michael Kremer, Bob Margo, Simona Mkrtschjan, Rohini Pande, Heather Royer, and Jeffrey Williamson. Thanks for useful comments to participants at the 45th Cliometrics Conference, the 36th Annual Conference on South Asia, and seminar audiences at Harvard, UC Davis, University of Toronto, Vanderbilt, Reed College, Case Western, University of British Columbia,...


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