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Research Questions

  1. What do we know about the economic effects of languages?
  2. What is the relative economic importance of language for trade sectors?
  3. What are the economic effects of investing in and extending languages education on the UK economy?

The UK has experienced a sharp decline overall in the uptake of languages since 2004, as evidenced by the falling number of entries for GCSE and A Level examinations in languages. At a time when the UK government seeks to reset its global economic relationships as part of its vision of 'Global Britain', such a decline is likely to have negative effects on the UK's ability to compete internationally,

This research assessed the economic value of languages to the UK in general and then evaluated the potential economic benefits to the UK of improving languages education in schools.

The study found that languages play a significant role in international trade and that not sharing a common language acts as a non-tariff trade barrier. A key finding of the study is that investing in languages education in the UK will most likely return more than the investment cost, even under conservative assumptions. The benefit-to-cost ratios are estimated to be at least 2:1 for promoting Arabic, French, Mandarin or Spanish education, meaning that spending £1 could return approximately £2.

The report's findings directly contribute to the evidence base in international economics and language policy and should be of interest to policy- and decision-makers both in language policy in general and in languages education in particular.

Key Findings

  • Having a common language can, all else being equal, reduce trade barriers and foster trade, akin to free-trade agreements.
  • Learning additional languages enhances human capital, with multilingual individuals potentially earning higher wages and having better labour-market outcomes.
  • While English plays an important role in determining business relations worldwide, it is not the sole driver in certain sectors and other languages matter equally, if not more, in reducing trade barriers.
  • UK exports are predicted to increase if there is an increase in languages: a full eradication of language barriers with Arabic-, Chinese-, French- and Spanish-speaking countries could increase UK exports annually by about £19bn.
  • Investing in languages education in the UK will most likely return more than the investment cost. The study estimates benefit-to-cost ratios of about 2:1 for promoting Arabic, French, Mandarin or Spanish education, meaning that spending £1 could return about £2.

Research conducted by

The research described in this report was funded through a research grant from the Arts and Humanities Research Council which was awarded to Professor Wendy Ayres-Bennett, University of Cambridge. The research was conducted jointly between the University of Cambridge and RAND Europe.

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