Every Language Has Value. Economics Helps Explain Why.

Κάθε γλώσσα έχει σημαντικότητα "Every language has value."

Economics helps explain why preserving community languages may be one of the smartest long-term investments Australia can make.

When asked, “why are languages valuable?” most people answer with cultural points like preserving traditions and connecting family histories.

In addition to languages and Greek culture - my other academic interest is economics. So can language itself create economic value? Increasingly, researchers are answering yes. No, languages aren’t commodities to be bought and sold, but they do develop skills, create opportunities, and make societies more productive.

Community languages deserve to be discussed not only by teachers and families, but also by economists, governments and business leaders.  Because they make good economic sense.

Are we using Australia’s multilingual economic advantage?

Australia likes to describe itself as multicultural. Yet, we rarely stop to consider what multicultural means in economic terms. One of the strongest arguments in What Are Languages Worth? Community Languages for the Future of New South Wales is that Australia already possesses a remarkable multilingual resource. We need to make full use of it.

Our numbers are strong:

• 300 languages are spoken making New South Wales one of the most linguistically diverse places in the world 
• 35,000 students, learn from more than 3,000 volunteer staff
• 316 approved providers teach 62 languages at 583 locations

In the Macquarie University report, What Are Languages Worth? Community Languages for the Future of New South Wales Alice Chik, Phil Benson, Nick Parr and Garry Falloon ask the question: What do languages contribute to the future of New South Wales?

The Macquarie report challenges the assumption that this activity is just a social or cultural activity. The authors argue community languages should be recognised as contributing to New South Wales' future economic, educational and social development and are already part of the state's learning ecosystem.

They argue that community languages contribute to economic capability, education, social cohesion, international engagement and sustainable development. They suggest that Multilingualism should be understood as an investment in the future of the state rather than preservation of the past.

Language is human capital

Economists use the term human capital to describe the knowledge, education and skills that increase people's ability to contribute productively to society.

We usually think about human capital in terms of qualifications, technical skills such as studying engineering or learning to code οr even the size of an economy’s workforce. Languages belong in exactly the same category.

Economists Gilles Grenier and Wei Zhang, writing for IZA World of Labor, describe language learning as an investment in human capital.

People who speak multiple languages often have access to wider labour markets, more international opportunities and a greater ability to work across cultures. In Australia, our businesses trade with Asia, Europe, the Middle East and the Americas. Every additional language expands the range of people, businesses and communities someone can work with. So language classes are doing far more than teaching vocabulary: they are developing future human capital.

The Macquarie report also makes this point and argues that multilingual skills should be recognised as a resource for New South Wales' future economic development.  Conversely, it warns that when community languages disappear across generations, we are losing accumulated human capital that has taken decades to develop.

That idea caught me. People often talk about language loss as a cultural tragedy, a linguistic shame. Researchers suggest it is also an economic loss.

Opportunity cost of losing languages

If economists view language as human capital, the next question becomes obvious. What should we do with that capital? Put simply, we should invest in it before it disappears. 

One of the most thought-provoking ideas in the Macquarie report is that losing a community language does more damage than just losing cultural diversity; it reduces economic capability. Economists call it a loss of human capital.

When a language disappears, society loses knowledge, international networks, cultural understanding and skills that have often taken decades to develop. Economics has another useful concept that we can apply to languages. Opportunity cost. Whenever we choose one path, we give up another.

Imagine two children growing up in Australia. One also develops literacy in Greek, Arabic, Mandarin or Italian through years of community and high school language education. The other focuses entirely on sport, and loses their heritage language entirely or never learns a second language in addition to English. 

The bilingual citizen possesses an additional skill that may prove valuable in business, education, healthcare, tourism, diplomacy, interpreting, community leadership or international trade. The second student has lost that possibility.

Australia already possesses enormous multilingual capability. Allowing it to disappear as an opportunity cost is economically unhelpful, because rebuilding these capabilities later is expensive, slow and often impossible.

In their article "Language Learning: Human Capital Investment or Consumption?", economists Markus Huber, Katrin Sommerfeld and Silke Uebelmesser argue that language learning contains both investment and consumption elements. People may learn languages because they enjoy doing so, but they also acquire skills that produce long-term returns through employment opportunities, mobility and broader capabilities. 

This point really resonates with me as a Greek foreign language learner.

Efficiency matters but isn't the whole story.

A shared language improves economic efficiency. Economists Gilles Grenier and Wei Zhang explain that when people can communicate easily, economies function more smoothly. Shared language reduces what economists call transaction costs: the time, money and effort required to exchange information and coordinate activities.

A common language makes it easier for people from different backgrounds to study together, work together and participate in public life.

Some people stop the conversation right here and say, ‘isn’t English enough then?’ It is a reasonable question, but economics is more nuanced.

Good economic policy is rarely about maximising a single outcome, rather it’s about balancing competing sources of value. In other words: How can Australia enjoy the efficiency of a shared language while also benefiting from multilingual capability?

Creating value beyond the individual

Community languages produce similar spillover benefits. LIke many people, I used to only think  of Greek in cultural terms. Learning a new language was just interesting, there certainly was no economic view to the seven year old me, the only non-Greek student in my Friday afternoon community language class at St Nectarios.

And economics has another useful concept for the community languages conversation: Positive externalities. An economic definition of an: externality occurs when the actions of one person create benefits or costs for a third party. 

We can look at learning Greek as a positive consumption externality; the consumption, or the learning of it has a benefit on the rest of the economy, which is that we are able to communicate more efficiently with each other and thus our economy and smaller communities operate more efficiently by reducing transaction costs. 

The Macquarie University report repeatedly argues that multilingual capability contributes to education, health services, community engagement, business, international relationships and social participation. These benefits extend well beyond individual speakers and strengthen New South Wales as a whole.

Learning Greek, Vietnamese, Arabic or Mandarin creates capability others can draw upon. None of these benefits belong solely to the language learner: They ripple outward.

Languages: worth more than markets can measure

One of the challenges in economics is that markets do not always capture everything that society values.

Parents reading to their children or volunteering at the local football club does not appear in Gross Domestic Product. These types of activities make a meaningful contribution to society, despite being difficult to measure financially, and languages belong in the same category.

Professor Tina Schroedler, Professor Alice Chik and Professor Phil Benson explore this idea in their paper, "The Value of Multilingualism for Sustainable Development." Drawing on language economics and sociolinguistics, they argue that multilingualism contributes to sustainable development because languages generate multiple forms of value simultaneously: economic, educational, cultural and social.

That observation helps resolve a false choice that often appears in public debate. If we ask only whether community languages increase wages, we ask too little. If we discuss only cultural preservation, we also ask too little.

The evidence suggests that languages operate across several dimensions at once. Economic value and cultural value are not rivals, but instead can be partners

Key Takeaways

• Economists increasingly describe language learning as an investment in human capital, not simply a cultural activity.
• The Macquarie University report What Are Languages Worth? Community Languages for the Future of New South Wales argues that multilingualism contributes to economic capability, education, international engagement and sustainable development.
• Losing community languages represents not only cultural loss but also the loss of valuable human capital and future economic opportunities.
• Supporting community languages should be viewed as a long-term investment in Australia's educational, social and economic future. Investment in existing educational infrastructure is strengthening a system that already delivers value.

 My journey of Greek & economics

When I first walked into a Greek community language school as a seven-year old, I didn’t even know what economics was.. I began learning Greek because I was curious. I kept learning because I loved the language and the community welcomed me.

Economics has given me a new vocabulary to describe the benefits. The language of economics explains why multilingualism matters. Reading the economics research has deepened how I think about that journey and further explained why we should work to keep growing languages.

Australia already possesses extraordinary multilingual capability. So it’s time we stopped asking whether community languages are worth our time and support and start asking whether Australia can afford not to support them.

If we value education, productivity, international engagement and strong communities, then investing in community languages is not simply good cultural policy - it’s also sound economic policy.

And that is one more reason to keep, Still Speaking Greek.

References

Chik, A., Benson, P., Parr, N., & Falloon, G. (2022). What Are Languages Worth? Community Languages for the Future of New South Wales. Macquarie University. https://www.mq.edu.au/__data/assets/pdf_file/0008/1354283/CL-report-2022-final-2.pdf

Grenier, G., & Zhang, W. (2019). The Value of Language Skills. IZA World of Labor, 205. https://wol.iza.org/articles/economic-value-of-language-skills

Huber, M., Sommerfeld, K., & Uebelmesser, S. (2022). Language Learning: Human Capital Investment or Consumption? Journal of Economics. https://doi.org/10.1007/s10663-022-09548-7

Schroedler, T., Chik, A., & Benson, P. (2023). The Value of Multilingualism for Sustainable Development: A Case Study of Community Languages in New South Wales In Multilingualism and Sustainable Development.