Economics of minority groups: labour-market returns and transmission of indigenous languages in Mexico

This study demonstrates a series of links between minority language skills, their economic return, and transmission across generations among Indigenous Mexican groups. We begin by estimating the differential in employment likelihood and wages between monolinguals of the dominant language (Spanish), relative to bilinguals who also know a local minority language. This effect of bilingualism on labour-market outcomes is identified using census and labour survey microdata and a matching procedure that ties individuals closely by ethnicity and socioeconomic cline. This enables us to separate language from ethnicity and reduce the bias driven by unobservable factors, compared to existing research. We find that, for indigenous Mexicans, retaining the minority language along with Spanish improves employment prospects, overturning earlier results. Next, we investigate whether languages that are associated with larger labour-market benefits are also more likely to be passed on from parents to children, using intergenerational microdata. We find this to be the case, even after a rich set of controls on socio-economic environment. The results support a view that even in the absence of institutional support, minority languages may sustain themselves over generations in an ecological niche supported by labour-market specialisation.