| Abstract: | I consider the optimal provision of public services when individuals' effective consumption of the services depends on their proficiency in the language they are provided in. A social planner chooses levels of provision in both a dominant and minority language which are financed by a linear tax on labor income. Minority language speakers make a costly investment to increase their proficiency in the dominant language. In doing so they increase their wage and, possibly, gain access to higher levels of public services provided in the dominant language. The planner faces a trade‐off between compensating minority language speakers for their lower wages and encouraging their integration by rewarding higher levels of dominant language proficiency. Under majority voting, it is possible that the level of public services is increasing in the relative size of the minority language community. This result contrasts with what is typically assumed in the literature on fractionalization and public good provision—that cultural heterogeneity decreases the level of public goods. |
