A Language Theory of Discrimination

A Language Theory of Discrimination
Author(s): Kevin Lang

Source: The Quarterly Journal of Economics, Vol. 101, No. 2 (May, 1986), pp. 363-382
Published by: Oxford University Press
Stable URL: http://www.jstor.org/stable/1891120 .
Accessed: 26/02/2014 21:09
Your use of the JSTOR archive indicates your acceptance of the Terms & Conditions of Use, available at .
http://www.jstor.org/page/info/about/policies/terms.jsp
.
JSTOR is a not-for-profit service that helps scholars, researchers, and students discover, use, and build upon a wide range of
content in a trusted digital archive. We use information technology and tools to increase productivity and facilitate new forms
of scholarship. For more information about JSTOR, please contact support@jstor.org.
.
Oxford University Press is collaborating with JSTOR to digitize, preserve and extend access to The Quarterly
Journal of Economics.
http://www.jstor.org
This content downloaded from 129.64.206.72 on Wed, 26 Feb 2014 21:09:21 PM
All use subject to JSTOR Terms and Conditions
A LANGUAGE THEORY OF DISCRIMINATION*
KEVIN LANG
Any advanced industrial society is composed of a number of speech commu-
nities with different verbal and nonverbal languages. In particular, in the United
States blacks and whites and men and women have sharply differing methods of
speaking and listening. This paper develops a model in which people can only
work together if they "speak" the same language and in which it is costly to learn
a second language. The competitive market will tend to minimize communication
through segregation, but if interaction is required, the cost will be borne by the
minority. A number of nontrivial predictions are derived from the model.
I. INTRODUCTION
Although discrimination has been the subject of a great deal
of study, none of the social sciences, including economics, has
developed an adequate explanation for its persistence. This paper
brings together three bodies of literature to develop a model that
not only is capable of explaining the existence of discrimination
but also has considerable empirical content that appears to be
confirmed.
The argument can be summarized in a few points. We know
from the sociolinguistic and sociological literature that the United
States (and most other societies) is composed of several distinct
subsets known as speech communities, which communicate using
related but different verbal and nonverbal languages. Language
can be viewed as a barrier to trade. Overcoming that barrier
involves transactions costs. A competitive market will organize
itself in order to produce the optimal level of transactions costs.
It follows that there will tend to be a single business language
that will tend to be the language of the economically most
pow-
erful group. Economic life will be segregated by speech community
in order to minimize transactions costs. Those transactions costs
that cannot be eliminated will be borne
by
the
minority group.
The minority group will tend to learn the language of the
majority
*1 am grateful to Kenneth Chomitz, Maxwell Fry, Amihai Glazer, Shulamit
Kahn, Lawrence Summers, Finis Welch, members of the UCLA Labor Workshop,
and an anonymous referee for comments and criticisms. I owe a special debt to
Martha Cox for guiding me through the sociolinguistic literature. Any remaining
errors are, of course, my own.
?) 1986 by the President and Fellows of Harvard College. Published by John Wiley & Sons, Inc.
The Quarterly Journal ofEconomics, May 1986 CCC 0033-5533/86/020363-20$04.00
364 QUARTERLY JOURNAL OF ECONOMICS
rather than vice versa and to the extent that the majority lan-
guage is learned in school, skilled minority members will tend to
get more education than their counterparts in the majority.
Since it is always possible to explain market imperfections
by transactions costs, it is therefore not generally desirable to do
so. However, three defenses of the language transactions cost
approach are provided in the paper. First of all, as outlined in
Section II, it is a distinct improvement over the existing theo-
retical literature on discrimination, which relies either on tastes
(as much of a deus ex machina as is transactions costs) or on
statistical discrimination having implications generally contrary
to factual evidence. The second defense is the reasonableness of
the assumption. Finally, the assumption gives rise to testable
hypotheses that appear to be confirmed. Section III reviews some
of the extensive literature on language differences in the United
States. Language is used here in a broader sense than that of
common parlance. Language refers to all aspects of verbal and
nonverbal communication by which individuals transmit infor-
mation. Blacks and whites or men and women can be said to
"speak" different languages in this sense. Finally, Section IV
derives a number of nontrivial predictions that appear to conform
to the evidence presented in Section V.
II. ECONOMIC THEORIES OF DISCRIMINATION
The modern economic theory of discrimination began with
Becker [1971] and was extended by Arrow [1972a, 1972b, 1974].
Becker and Arrow suggest that people have attitudes toward those
with whom they work, those whom they supervise, and those from
whom they buy goods. They require compensation
in order to work
with members of the group they do not like. If all workers or
employers share the same taste for discrimination, the group that
is discriminated against will receive lower wages to compensate
the discriminators. The Becker-Arrow model has two well-known
drawbacks. First, it is unsatisfactory to explain phenomena by
tastes, since ultimately all economic phenomena can be "ex-
plained" by invoking the right utility function. Second, in a com-
petitive market discriminators will be driven out by nondiscrimi-
nators. The result might be segregation, but wages would be equal
for all groups. Thus, we are left to choose between denying the
A LANGUAGE THEORY OF DISCRIMINATION 365
existence of perfect competition and deciding that we are all
bigots.
Recognizing these difficulties, Arrow [1974] proposes an
al-
ternative model in which employers believe that one group (blacks)
is less productive. If there are different skill levels, blacks
may
never be employed in the higher skill jobs. Therefore, the false
belief may never be proved wrong. The
equilibrium, however, is
not stable if firms experiment. The only way blacks would receive
lower wages in the long run is if they were, on
average, less
productive.
Arrow's model of statistical discrimination and a similar model
developed by Phelps [1972] is extended in Aigner and Cain [1977].
In their model blacks and whites have the same average produc-
tivity, but employers observe blacks' productivities with greater
error. Bayesian employers will estimate the workers' productiv-
ities as a weighted average of mean productivity and measured
productivity; they will place more weight on the mean in the case
of blacks because of the greater measurement error. Conse-
quently, blacks who appear to be highly productive receive lower
wages than whites who appear to be equally productive; on the
other hand, blacks who appear to be relatively unproductive do
better than their white counterparts. As the authors note, it is
difficult to label this equilibrium discriminatory, since both groups
receive the same average compensation. Blacks will receive lower
average compensation only if firms are risk averse, an assumption
rejected by most economists.
To explain differences in average wages for groups with equal
initial endowments, Lundberg and Startz [1983] suggest a model
in which workers can invest in human capital. Since their pro-
ductivity is observed with greater error, blacks are compensated
for a lower proportion of their increased productivity and therefore
receive a lower return to education than do white workers. As a
result, black workers invest less in education, are less productive,
and receive lower average wages than do whites. This model has
several difficulties. First, it assumes that employers cannot ob-
serve levels of education. Second, it cannot explain why blacks
get lower wages than do whites (holding other factors such as
education constant). Third, it appears that blacks get more edu-
cation not less than equivalent whites (holding other factors con-
stant) [Griliches, Hall, and Hausman, 1978; Lang, 1982].
Thus, neither the Becker-Arrow tastes model nor the Arrow-
Phelps statistical discrimination model provides an adequate ex-
planation of the persistence of discrimination. This is not to say
that tastes do not explain any form of discrimination. They may
serve as the basis for discrimination in goods such as education
that are not provided in competitive markets. Similarly, stereo-
typing may play a role particularly when there is social enforce-
ment of prevailing norms [Akerlof, 1976].
Before leaving this section, special consideration must be
given to Welch's [1967] model of discrimination. Welch argues
that complementarities in production cause black and white work-
ers to be employed together. In particular, high and low education
workers are complements, and blacks, for historical reasons, tend
to have less education than do whites. Welch assumes that there
is a fixed cost involved in obtaining cooperation among members
of different races. This cost depends only on the minimum number
of workers from either group and may result from tastes for dis-
crimination or from problems of communication. Under these as-
sumptions, without complementarities there would be segrega-
tion. The cost of mixing the two races is borne by the minority
race, and the return to schooling is lower for minority workers if
employed with majority workers. Consequently, educated minor-
ity workers will tend to work only with members of their own
race. One important result is that as the educational attainments
of the two races converge, there will be more segregation al-
though, as Welch recognizes, if education tends to diminish the
costs of integration, this effect may be offset.
The model presented in this paper assumes that the cost of
integrating the work force is the cost of allowing members of
different groups to communicate. Section IV discusses the impli-
cation of this assumption. The assumption itself is the subject of
the next section.
III. SPEECH COMMUNITIES
Shared knowledge of a grammar and a sound system is not
sufficient for mutual intelligibility. Individuals must also have
common knowledge of ways of speaking [Hymes, 1964] and ways
of listening [Erickson and Shultz, 1982]. The language that must
be shared is not only verbal but also nonverbal including such
elements as posture, gesture, and eye contact. Sociolinguists have
coined the terms "communicative competence" to refer to the com-
plete knowledge needed for mutually intelligible conversation
and "speech community" to refer to a set of individuals who share
communicative competence [Gumperz, 1968].
Confusion and misunderstanding may occur when people from
different cultures meet even when one is fluent in the other's
language. The case of the Arab who starves at a European banquet
because his refusal of food is taken at face value is now legendary
[Argyle, 1967]. Hall [1955] notes Latin Americans may chase
Europeans and Americans around the room as they try to estab-
lish their different customary social distances.
Such differences are not limited to individuals from different
countries. Sociolinguists have noted sharp differences among in-
dividuals from different speech communities within the United
States. It is widely recognized that Black English is distinct from
Standard American [Fasold and Wolfram, 1970; Labow, 1971,
1973]. Black English has its own grammar, vocabulary, and pho-
netics. This does not imply that all blacks speak Black English
or that Black English is unrelated to Standard American. Never-
theless, a substantial proportion of inner city blacks do speak a
version of English, which differs from the version taught in schools.
Differences include a relative absence of the verb "to be" as a
verb predicate (that dude bad), dropping the s in the third person
singular (he run), and dropping R's (Carol becomes Cal).
Probably, relatively little misunderstanding among native
American speakers results from differences of grammar or pro-
nunciation. A few examples have been noted. "Dey ain't like dat"
is likely to be translated as "they aren't like that" rather than
"they didn't like that," [Stewart cited in Fishman, 1971]. How-
ever, generally, people will realize that they have not understood
or been understood. Not surprisingly, speakers are understood
best by members of their own status group [Harms, 1961].
Misunderstanding is much more likely to arise because in-
dividuals are unaware of verbal or nonverbal differences between
groups other than grammar and pronunciation [von Raffler-En-
gel, 1980]. Among educated southerners, the use of ain't is a signal
that the listener has been accepted and that the speakers can
shift from formal to informal mode. Northerners who do not un-
derstand the signal or who by training are unable to return it
are likely to be viewed by southerners as stuffy [McDavid, 1973].
Nonverbal differences may be particularly important. French [1973]
found that black and white children are equally good at express-
ing themselves nonverbally. However, black children understand
black children better, and white children understand white chil-
dren better.
Misunderstandings are important in work-related situations.
Burns [1957] found that over half of managers' decisions or in-
structions were perceived by subordinates as information or ad-
vice. Similarly, women tend to be more verbal than men in the
sense that they will talk longer than men when asked to describe
a picture; in male-female exchanges, however, men do more of
the talking. One possible explanation is that women appear to
look for visual cues giving permission to break in, while men
carry on speaking until receiving visual signals that the other
wants to speak [Argyle, 1967]. Thus, women may have relative
difficulty obtaining the floor in mixed conversation.
One of the most striking examples of communication break-
down as a result of different nonverbal codes is described in Er-
ickson and Shultz [1982]. They studied the interaction between
guidance counselors and students. They argue that at regular
intervals speakers signal that a listening response is required. If
the expected listening response is not forthcoming, the speaker
assumes that the listener has not understood the content of his
message and repeats the explanation. Among white counselors
the signal that a listening response was desired was a pause
without a shift in intonation at the end of a syntatic clause. Blacks
use a high steeply falling contour that may precede a filler such
as "you know." Whites' listening responses consist of a verbal
response, or a pronounced nod of the head, or both. Among blacks
the listening response is a less pronounced nod of the head. The
result of these differences was that white counselors often missed
blacks' listening responses. Consequently, they would repeat their
explanations. The student in turn would feel that he was being
"talked down" to, and his confidence in the usefulness of the coun-
selor's advice would be diminished or even destroyed.
Cases of nonverbal codes causing breakdowns in male-female
communication have not been as well documented. Nevertheless,
it has been recognized that both women's speech patterns and
nonverbal styles are associated with low power in U. S. society
[Henley, 1977]. Individuals using "women's communicative style"
are evaluated as less intelligent and competent than when they
express the same arguments using "men's communicative style."
One possible explanation is that the style used by women is less
effective. Effective intervention requires authoritative, self-con-
fident, and directive speech. However, as Cox [1983] points out,
women's speech styles, which are considered inappropriate for
success in the United States, are quite similar to those used by
Japanese managers, a group generally considered to be successful
in business. Nevertheless, Cox reports that women's communi-
cation styles have been a significant impediment to their ad-
vancement in U. S. industry.
If nonverbal codes create a barrier to communication, tcom-
munications entrepreneurs" would presumably appear to fill the
gap by serving as translators. At the very least, we would expect
some individuals to learn the other group's code. Indeed, some
members of the minority group learn the majority's
code. There
is an extensive literature on code-switching by individuals who
operate in two speech communities.
Thus, the sociolinguistic literature demonstrates that there
are costs associated with overcoming the barriers to communi-
cation between speech communities. In the following section a
simple model is developed which assumes that these costs exist
and has entrepreneurs acting as links between different speech
communities. A further defense of the model is provided
in the
fifth section when theoretical predictions are confronted with em-
pirical evidence.
IV. LANGUAGE AND DISCRIMINATION
Assume for simplicity that there are just two states, having
a common language (communication) and not having a common
language (noncommunication). Further assume that two actors
must communicate in order to complete a transaction or produce
output and that if they do not speak a common language, no
business can be transacted and no output produced. The marginal
cost of learning a language is constant across all languages, across
the number of languages learned and across individuals. Lan-
guage is strictly productive. Individuals do not derive utility from
learning additional languages.
Breton and Miezkowski [1977] have analyzed the develop-
ment of lingua franca. They argue that when members of several
different language groups all interact, they will tend to use the
most common language as a lingua franca. This follows from the
fact that transactions costs are minimized when each member
learns no more than one language and when the largest possible
number learns none. This suggests that there is a role for extra-
market forces and history in the determination of the lingua franca.
If some people already know a second language, the lingua franca
may not be the most common first language. Thus, there are many
possible equilibria.
Since learning a language is costly, market forces will act to
limit the extent to which members of different language groups must
interact. In the extreme case, there will be complete segregation.
If two speech communities, L1 and L2, have the same production sets,
the same tastes, and there are no increasing returns to scale, there
will be no interaction between the groups, since there are no gains
from trade. Since trade involves transactions costs, no trade will
occur. In general, however, these conditions will not hold. As a re-
sult, trade will be beneficial, and interaction between the groups will
take place. However, market forces will tend to minimize the de-
gree of interaction. Thus, we would expect occupational segrega-
tion to be widespread. Only a relatively small number of individ-
uals will serve as intermediaries.
In the remainder of this section, I consider a model in which
there are workers from two speech communities, whites who speak
W and blacks who speak B. The two communities trade because
of differences in the capital-labor ratio in the two communities.
Whites have more capital relative to workers and therefore hire
black labor.
In equilibrium the marginal cost to whites of hiring blacks
and whites including transactions costs must be equal. Similarly,
blacks must receive the same net of transactions cost wages whether
they work for a white or black firm. In the following paragraphs
these equilibrium conditions are used to determine relative wages
for blacks and whites.
Consider first the case of a white employer who is considering
hiring a fixed number of workers. An integrated work force is
clearly an inferior mode of production, since it unnecessarily re-
quires many workers to learn a second language. Consequently,
the employer must choose among three options: hiring only whites,
hiring blacks who have learned W, and hiring unilingual blacks
and learning B. Consider the employer's costs under the three
options. If he hires only whites, he incurs costs equal to
(1) costs=
nww,
where n is the number of workers employed and
ww
is the wage
for whites. If he hires bilingual blacks, he must pay each worker
the going wage for unilingual blacks plus the amortized cost of
learning a language, denoted by d. Thus, his total costs are
(2) costs = n(Wb + d),
where Wb is the market wage for unilingual blacks. Finally, if he
hires unilingual blacks, he must learn to speak B. His costs are
therefore
(3) costs = nWb + d.
If we compare (2) and (3), it is immediately apparent that if
the employer hires more than one black worker, he will hire
unilingual blacks and learn B himself, since for n greater than
one, (3) is always less than (2). The assumption that the cost of
learning a language is equal for all workers is, of course, restric-
tive. If the cost to owners of learning a language is much higher
than the cost to workers, it is possible that the workers rather
than the owner will learn the language.
If we maintain the assumption that the cost of learning a
language is equal for all workers, we can use (1) and (3) to derive
the black-white wage differential. If some firms hire whites and
some hire blacks, the total costs from the two strategies must be
equal. Setting (1) equal to (3) and rearranging terms, we obtain
(4) Wb
=
Ww
-
din.
The black-white wage differential is therefore equal to din.
So far the results resemble those that are derived from the
"tastes" model of employer discrimination. The major differences
are that employers hiring blacks make "higher profits" because
they are compensated for learning B and that there is no long-
run tendency toward the elimination of wage differentials in the
language model. In the tastes model, discrimination will be elim-
inated, unless bigotry is nearly universal, a stronger assumption
that most economists wish to make. However, as noted in Section
III, language differences are nearly universal; so wage differen-
tials will tend to persist.
Consider now the case of a white employer who is considering
hiring two types of labor that must communicate, one supervisor
and supervisees (called workers). For simplicity, assume that the
ratio of workers is fixed by technology so that there are n workers
for each supervisor. The employer has four options, to hire a white
supervisor and white workers, a black supervisor and white work-
ers, a white supervisor and black workers, or a black supervisor
and black workers.
The case of the all-white work force sets the standard for
comparison. Supervisors are assumed to receive a wage just suf-
ficient to compensate them for additional effort and training re-
quired for their job:
(5) WWs
=
WW
+
C,
where
wws
is the wage white supervisors receive and c is the
compensating differential. The firm's total labor costs are
(6) costs= (n +
1)ww
+ c.
Suppose instead that the employer hires black workers and
a
bilingual
black
supervisor.
The firm's labor costs are
(7) costs =
Wbs
+ n Wb,
where Wbs is the wage received by black supervisors. Since black
supervisors must be compensated both for the cost of learning W
and for being supervisors, we know that
(8) Wbs
=
Wb + c + d.
If some firms hire black workers and supervisors and some
firms hire white workers and supervisors, costs must be equal for
the two types of labor force. Setting (6) equal to (7) and using (8),
we can derive the black-white wage differentials for supervisors
and workers,
(9) Wbs =
WWS
+ ndl(n + 1),
and
(10) Wb =Ww
-dl(n + 1).
A number of points are apparent from (9) and (10). Black
supervisors earn more when they supervise black workers than
they would if they supervised white workers, since supervisors of
whites are paid only
wws.
In addition, the "compensating differ-
ential" for supervising blacks is insufficient to compensate white
supervisors for learning B. Thus, in accordance with the principle
of maximal segregation, black supervisors will be matched with
black workers and white supervisors with white workers. How-
ever, the gain from having black rather than white supervisors
in a firm with black workers is small (dI(n + 1)).
Just as black supervisors are matched with black workers,
black owners will be matched with black supervisors and workers.
Thus, if there were no market imperfections, only blacks would
work in black-owned firms. The driving force behind this result
is that transactions costs are minimized by maximal segregation.
So far we have assumed that all firms employ workers and
supervisors in the same proportions. If different industries have
different technologies so that requisite supervisor-worker ratios
differ, blacks will be employed in those firms with the largest
worker-supervisor ratios. To see this, let n be the worker-super-
visor ratio at which firms are indifferent between hiring white
and black work forces so that (6) and (7) are equal. Consider a
firm for which the worker-supervisor ratio is m. From (9) and
(10), the cost to a white employer of hiring an all black work force
is
(11) cost =
Wws
+
mww
- (m - n)dI(n + 1),
while the cost of hiring an all-white work force is
(12) cost = was +
mwW.
If the ratio of workers to supervisors is above the point at which
firms are indifferent between hiring white and black work forces
(i.e., for m greater than n), hiring an all-black work force will
minimize the cost of production, while for m less than n, the firm
will minimize cost by hiring whites.
Thus, in addition to having lower lifetime earnings because
they must bear the cost of intergroup communication, blacks have
lower wages because they are occupationally segregated into low
wage jobs; that is, they are employed in firms with relatively low
supervisor-worker ratios. A higher proportion of whites than of
blacks are supervisors. The driving force behind this result is that
the difference between supervisors' and workers' wages is greater
for blacks than for whites, since black supervisors are not only
compensated for the costs of becoming a supervisor but also for
the cost of learning W (see equations (9) and (10)). Again, trans-
actions costs are minimized by minimizing the number of people
who learn a second language, that is, by employing blacks in
firms with few supervisors. This result does not depend on the
restrictive assumption of fixed factor coefficients for supervisors
and workers. On the contrary, since the difference between su-
pervisors' and workers' wages is greater for blacks than for whites,
firms employing a black work force will substitute
away from
supervisors toward workers, thereby reinforcing
the
tendency for
blacks to be concentrated in low-skill
jobs.
Although black supervisors earn more than white supervi-
sors, the model is perfectly consistent with whites earning higher
wages than blacks at all levels of schooling. This point follows
directly from (10) for workers who do not learn W but bear part
of the cost of the supervisor learning a second language. Black
supervisors will also earn less than whites with the same amount
of education if language is learned in school. To see this, we must
recognize that d represents the extra income required to com-
pensate black supervisors for the time spent in school learning
W. Whites who spend an equivalent time in school to learn some-
thing else will also receive compensation at least equal to d to
compensate them for the cost of their time spent in school. Thus,
whites with educations equal to those of black supervisors will
receive at least
(13)
w
As
+
d,
which is greater than the wage received by black supervisors.
Whether blacks or whites obtain more education is indeter-
minate in this model. On the one hand, blacks are relegated dis-
proportionately to low-skill jobs. On the other hand, those in high-
skill jobs will generally have more education. It is not self-evident
which effect would dominate.
In this model the return to education is actually higher for
blacks than for whites. Both blacks and whites receive compen-
sation of c for being supervisors. However, blacks who are not
supervisors receive lower wages than whites who are not super-
visors. Therefore, the percentage return is higher for blacks than
for whites. This result depends crucially on the assumption that
the compensation required for being a supervisor is independent
of income. If c were proportional to income, the return to schooling
would be identical for blacks and whites.
A stronger prediction can be made regarding changes in ed-
ucational attainment when the system is in disequilibrium. In
equilibrium blacks should supervise blacks, and whites should
supervise whites. Suppose, however, that the distribution of su-
pervisory skills by race is nonoptimal and that some blacks are
supervised by whites, as would be the case were there discrimi-
nation in the provision of school services. In this case, black and
white supervisors will receive the same wage, and therefore, the
return to education will definitely be higher for blacks. Therefore,
educational attainment will rise faster for blacks than for whites.
Thus, holding parental education constant, we would expect blacks,
on average, to get more education than do whites.
This section has developed the theoretical implications of a
model which assumes that language differences impose trans-
actions costs. The next section reviews the evidence relating to
those predictions.
V. EMPIRICAL EVIDENCE
The model outlined in Section IV is consistent with persistent
wage differentials between blacks and whites or men and women.
To the extent that blacks and whites remain in different speech
communities and whites are the economically dominant group,
blacks will receive lower wages. Segregation in both the north
and south has contributed to the maintaining of distinct speech
communities for blacks and whites. In fact, enforced segregation
may be the primary factor that has prevented the economic rise
of blacks. While other immigrant groups mixed freely with mem-
bers of the dominant speech community, blacks were unable to
do so.
It is clearly more difficult to argue that persistent male-fe-
male wage differentials are based on segregation since in the
United States girls and boys have generally mixed socially and
attended the same schools. Nevertheless girls and boys have re-
ceived different social training, which is reflected in language
differences.
Desegregation has been associated with a narrowing of black-
white wage differentials [Welch, 1973; Freeman, 1973; Smith and
Welch, 1977], although a variety of explanations have been put
forward for this development. On the other hand, male-female
differentials have remained roughly constant despite similar leg-
islation governing equal pay and prohibiting discrimination against
blacks and women. The model developed in the previous section
suggests that the wage differential will only narrow as language
differences are reduced. Henley [1977] reports that nonverbal
behavior differs between feminists and nonfeminists. It is possible
that the wage differential will narrow as the daughters of fem-
inists enter the labor force.
The view that "successful" minority members will know the
language of the majority has been confirmed by several observers.
O'Barr and Atkins [cited in Cox, 1983] found that women in high-
status occupations tend to use a "male communication style."
Similarly, black guidance counselors knew white codes for evok-
ing and giving a listening response [Erickson and Shultz, 19821.
The language model also implies that minority members will
tend to learn the language of the majority. This tendency is borne
out by empirical research. Black counselors knew the white code
and used it with white students. Some black students sporadically
used white codes when dealing with a white counselor [Erickson
and Shultz, 1982]. Whites never used black code. Among bilingual
Canadian children, French children sometimes used English code
with English children. English children never used French code
[von Raffler-Engel, 1975].
Like the "taste"-based models of discrimination, the language
model implies segregation. Moreover, in the language model mi-
nority members will tend to be disproportionately in low-skill
occupations. While Arrow's model of statistical discrimination
and the model developed by Startz and Lundberg are consistent
with minorities being in low-skill jobs, they do not imply segre-
gation. Occupational segregation has been a major theme in the
literature on women in the labor force [Blaxall and Reagan, 1976]
and a lesser one in the racial discrimination literature.
One of the surprising implications of the language model is
that, if members of the majority supervise minority workers, hold-
ing parental education constant, minorities will get more, not
less, education than members of the majority. None of the dis-
crimination models, with the exceptions of Arrow's statistical dis-
crimination model with no experimentation, is consistent with
this result. In fact, it appears to be correct for blacks [Griliches,
Hall, and Hausman, 1978; Lang, 1982]. The case of women is
more complicated. Presently, women have a higher rate of grad-
uation from high school and a lower rate of college attendance.
More significantly, educational attainment has been rising faster
for women than for men [Lloyd and Niemi, 1979].
It follows from the language model that for a given skill level,
minority members will have more education than majority mem-
bers. Assuming that language is learned in part in school, mi-
nority members will, in addition to obtaining other productive
skills, get extra education in order to master the majority lan-
guage. This prediction also appears to be confirmed [Schmidt and
Strauss, 1975].
The language model also implies that minorities will be in
firms in which there is a high ratio of workers to supervisors, or
more precisely, that they will be in positions where the ratio of
workers who must be bilingual to workers who need not be bi-
lingual is small. McLaughlin and Turner [1982] found that among
California lawyers at the associate level and with less than ten
years experience, a significantly higher proportion of women than
men were in large firms.
The empirical content of the language model is therefore
much richer than that of the tastes model. The language model
makes several predictions that are not derived from tastes models:
"successful" minority members know the dominant language, mi-
norities are more educated given their skill level, and minorities
are in firms with low supervisor-worker ratios. Both models imply
that there will be occupational segregation and that minority
members will receive lower wages, although these are short-run
phenomena in the tastes model. There are three points on which
the models disagree. The tastes models implies that minorities
will receive lower returns to skill level and education. The lan-
guage model does not predict a lower return to schooling but does
predict a higher return to skill level. Prior to 1960 returns to
education were lower for blacks than for whites [Welch, 1967],
perhaps because of lower quality education [Welch, 1973]; more
recent evidence for blacks and women is mixed, but it appears
that returns to education are similar for men and women and
blacks and whites [Lang and Ruud, 1986; Lloyd and Niemi, 1979].
Finally, the language model implies that education levels will
rise faster for minorities, while this will only be true in the tastes
model if discrimination is decreasing. Education levels have been
rising faster for blacks and women than for whites and men, even
though there is little evidence that discrimination against women
is decreasing.
VI. THE EVOLUTION OF SPEECH COMMUNITIES
Within the framework of a static model, government can
promote equality goals only at the cost of efficiency. Occupational
segregation occurs in such a way as to minimize transaction costs.
Thus, affirmative action laws must decrease total income. Equal
pay laws will, due to occupational segregation, have no effect
unless they incorporate the somewhat nebulous concept of equal
pay for equal work.
It is possible that government could reduce transaction costs
378 Q UAR TERLY JOURNAL OF ECONOMICS
by promoting "black capitalism." In the model presented in this
paper, interaction between different speech communities occurs
because capital is relatively scarce in one community. By trans-
ferring capital from one community to another, government could
reduce the need for interaction, thereby lowering language costs
and increasing total output.
However, in a dynamic model there may well be a wider role
for government policy and minimizing short-run transaction costs
may not be desirable. In an overlapping generations framework,
the lingua franca chosen need not be efficient. Thus, French re-
tained its dominance in diplomacy long after French power had
waned simply because anyone wanting to become a diplomat had
learned French. If it were possible for generations yet to be born
to pay the existing diplomats to learn English, they might have
chosen to do so. At the same time, it may not be worthwhile for
the generation entering the diplomatic service to pay the cost of
the transition from French to English themselves. In fact, given
that the new generation is always small relative to the number
of incumbents, while the number of future generations is large,
it may frequently be the case that the lingua franca is nonoptimal.
The model presented in this paper assumed that either people
can communicate or they cannot. It is more reasonable to assume
that there are degrees of communication. As two people's under-
standing of a mutual language improves, the probability of a
costly misunderstanding decreases. It is consistent with economic
reasoning to assume that the marginal cost of mastering a lan-
guage is increasing in the level of mastery. Transactions costs
will therefore be minimized if the lingua franca is some combi-
nation of participants' languages. In Quebec where the most com-
mon language is French but a substantial proportion speak En-
glish, some people have suggested that it is cheaper to learn to
understand a language than to learn to speak it. The cheapest
way of arranging intergroup communication is through passive
bilingualism in which each person understands the other's lan-
guage but uses his primary language when he speaks. An alter-
native is that everyone speak "franglais."
The possibility of the development of such a lingua franca
provides a justification for affirmative action policies. Common
languages evolve. Presently the dominant language of business
is derived from the language of white males. Women and blacks
are at a disadvantage. As more women and blacks enter higher
level positions, the language is likely to evolve. Gumperz [1971]
documents the tendency of languages to converge. This also sug-
gests that promoting black capitalism may be less desirable in
the context of a dynamic model than it is in the static model. By
promoting black capitalism, government would improve the sta-
tus of blacks but would also promote segregation. This, in turn,
might impose higher long-run costs on blacks.
School integration can also be justified as promoting a more
socially desirable lingua franca. However, if in integrated settings
new languages tend to develop that are not the language of busi-
ness, whites coming from integrated schools will be at a disad-
vantage. Consequently, we would expect strong opposition to in-
tegration, from success-oriented parents.
Since, in the United States, coeducational schools have been
the rule for a long time, it may appear that mixing "linguistic"
groups does not lead to the development of a common language.
In fact, relatively little is known regarding the determinants of
the type of lingua franca that arises [Samarin, 1968; Reinecke,
1964]. Clearly, there is a tendency for different groups not to
interact unless obligated to do so, since communication across
language groups is difficult. Casual observation indicates that
there is strong segregation by sex even within coeducational schools.
Thus, simple "integration" may be insufficient for the develop-
ment of a common language.
Integration does appear to change attitudes regarding mi-
norities. Sheatsley [1966] found a sharp decline in anti-black at-
titudes following desegregation. Similarly, a higher proportion of
men are opposed to working with women before working with
them than afterwards. One possible explanation is that bigotry
evolves out of miscommunication or, more generally, a lack of
familiarity with minority customs.
Nevertheless, it is not the objective of this paper to explain
all forms of discrimination by the language model. Clearly, goods
(or bads) such as geographic and educational segregation (not
provided through the competitive market), can be based on tastes.
However, it appears that wage discrimination must be explained
in other terms. One phenomenon that the language model can
only partially explain is the "successful minorities," such as the
Chinese in southeast Asia, the Lebanese in South America, and
the Jews in North America. It is striking that these groups have
been successful through entrepreneurship rather than rising
through the corporate hierarchy. They have accumulated capital
that has allowed them to become net hirers, but this fact only
raises the question as to why or how they accumulated capital.
VII. CONCLUSION
This paper makes use of the fact that communication is fre-
quently not costless and that communication is more costly be-
tween dissimilar groups. It follows that the competitive market
will tend to minimize intergroup communication (segregation).
Small groups must bear the cost of communication so that dis-
crimination can persist even in a competitive market. Although
in a static framework, competitive equilibrium is efficient, there
is a role for government in the context of overlapping generations.
Government can affect the nature of the common language and
thereby reduce transactions costs.
UNIVERSITY OF CALIFORNIA, IRVINE
REFERENCES
Aigner, Dennis J., and Glen Cain, "Statistical Theories of Discrimination in Labor
Markets," Industrial and Labor Relations Review, XXX (1977), 175-87.
Akerlof, George, "The Economics of Caste and of the Rat Race and Other Woeful
Tales," this Journal, XC (1976), 599-617.
Argyle, Michael, The Psychology of Interpersonal Behaviour (London: Penguin,
1967).
Arrow, Kenneth J., "Models of Job Discrimination," and "Some Models of Race
in the Labor Market," in A. H. Pascal, ed., Racial Discrimination in Economic
Life (Lexington, MA: D. C. Heath, 1972).
"The Theory of Discrimination," in 0. Ashenfelter and A. Rees, eds., Dis-
crimination in Labor Markets (Princeton, NJ: Princeton University Press,
1974).
Becker, Gary S., The Economics of Discrimination, 2nd ed. (Chicago: University
of Chicago Press, 1971).
Bernstein, Basil, "Social Class and Linguistic Development: A Theory of Social
Learning," in A. Halsey, J. Floud, and C. Anderson, eds., Education, Economy
and Society (New York: Free Press, 1961).
Blaxall, Martha, and Barbara Reagan, eds., Women and the Work Place (Chicago:
University of Chicago Press, 1976).
Breton, Albert, and Peter Mieszkowski, "The Economics of Bilingualism," in W.
Oates, ed., The Political Economy of Fiscal Federalism (Lexington, MA:
D. C. Heath, 1977).
Burns, Tom, "Management in Action," Operational Research Quarterly, VIII (1957),
45-60.
Cox, M. G., "Enter the Stranger: Unanticipated Effects of Communication on the
Success of an Organizational Newcomer," in L. Thayer and 0. Wiio, eds.,
Explaining Organizations (New York: Ablex, 1983).
Erickson, Frederick, and Jeffrey Shultz, The Counselor as Gatekeeper (New York:
Academic Press, 1982).
Fasold, Ralph W., and Walt Wolfram, "Some Linguistic Features of Negro Dia-
lect," in R. Fasold and R. Shuy, eds., Teaching Standard English in the Inner
City (Washington, DC: Center for Applied Linguistics, 1970).
Fishman, Joshua A., "The Sociology of Language: An Interdisciplinary Social
Science Approach to Language in Society," in J. Fishman, ed., Advances in
the Sociology of Language, Vol. I (The Hague: Mouton, 1971).
Freeman, Richard B., "Changes in the Labor Market for Black Americans, 1948-72,"
Brookings Papers on Economic Activity, 1 (1973), 67-120.
French, Patrice, "Kinesics in Communication: Black and White," Language Sci-
ences, XXVIII (1973), 13-16.
Griliches, Zvi, Bronwyn Hall, and Jerry Hausman, "Missing Data and Self-Se-
lection in Large Panels," Annales de L'insee, XXXI-II (1978), 137-76.
Gumperz, John J., "Conveyance and Creolization: A Case from the Indo-Ar-
yan/Dravidian Border in India," in J. Gumperz, ed., Language in Social Groups
(Stanford, CA: Stanford University Press, 1971).
"The Speech Community," International Encyclopedia of the Social Sciences
(New York: Macmillan, 1968).
Hall, E. T., "The Anthropology of Manners," Scientific American, CXCII (1955),
84-90.
Harms, L. S., "Listener Comprehension of Speakers from Three Status Groups,"
Language and Speech, IV (1961), 109-12.
Henley, Nancy M., Body Politics (Englewood Cliffs, NJ: Prentice-Hall, 1977).
Hymes, Dell, "Toward Ethnographies of Communication," American Anthropol-
ogist, LXVI (1964), 1-34.
Labow, William, "The Study of Language in Its Social Context," in J. Fishman,
ed., Advances in the Sociology of Language, Vol. I (The Hague: Mouton, 1971).
"The Logic of Nonstandard English," in R. Bailey and J. Robinson, eds.,
Varieties of Present-Day English (New York: Macmillan, 1973).
Lang, Kevin, "Human Capital, Screening, and Minimum Wages," Ph.D. thesis,
M.I.T., 1982.
, and Paul A. Ruud, "Returns to Schooling, Implicit Discount Rates and Black-
White Wage Differentials," Review of Economics and Statistics (1986).
Lloyd, Cynthia B., and Beth T. Niemi, The Economics of Sex Differentials (New
York: Columbia University Press, 1979).
Lundberg, Shelley J., and Richard Startz, "Private Discrimination and Social
Intervention in Competitive Labor Markets," American Economic Review,
LXXIII (1983), 340-47.
McDavid, Raven I., "Go Slow in Ethnic Attributions: Geographic Mobility and
Dialect Prejudices," in R. Bailey and J. Robinson, eds., Varieties of Present-
Day English (New York: Macmillan, 1973).
McLaughlin, Elizabeth M., and Teresa L. Turner, "The Human Capital Approach
to Occupational Segregation within California Firms," mimeo, 1982.
Phelps, Edmund S., "The Statistical Theory of Racism and Sexism," American
Economic Review, LXII (1972), 659-61.
Reinecke, John, "Trade Jargons and Creole Dialects as Marginal Languages," in
D. Hymes, ed., Language in Culture and Society (New York: Harper & Row,
1964).
Samarin, William J., "Lingua Francas of the World," in J. Fishman, ed., Readings
in the Sociology of Language (The Hague: Mouton, 1964).
Schmidt, Peter, and Robert Strauss, "The Prediction of Occupation Using Multiple
Logit Models," International Economic Review, XVI (1975), 471-86.
Sheatsley, Paul B., "White Attitudes Towards the Negro," Daedalus, IVC (1966)
217-38.
Smith, James P., and Finis R. Welch, "Black-White Male Wage Ratios: 1960-70,"
American Economic Review, LXVII (1977), 323-38.
von Raffler-Engel, Walburga, "Linguistic and Kinesic Correlates in Code-Switch-
ing," in T. Williams, ed., Socialization and Communication in Primary Groups
(The Hague: Mouton, 1975).
"The Unconscious Element in Intercultural Communication," in R. St. Clair,
and H. Giles, eds., The Social and Psychology Contexts of Language (Hillsdale,
NJ: Lawrence Erlbaum, 1980).
Welch, Finis, "Labor Market Discrimination: An Interpretation of Income Dif-
ferences in the Rural South," Journal of Political Economy, LXXV (1967),
225-40.
, "Black-White Differences in Returns to Schoolings," American Economic
Review, LVIII (1973), 898-907.

A Language Theory of Discrimination

Uploaded by

Document Information

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

A Language Theory of Discrimination

Uploaded by

Copyright:

Available Formats

A Language Theory of Discrimination

Author(s): Kevin Lang

You might also like