Switching to English to Attract Global Talent

Abstract:          

When organizations’ demand for talent exceeds domestic supply, they can recruit from abroad, but language barriers impede matching. Switching operations to the lingua franca can, in principle, relax this constraint. We show for a model of assortative matching that the abolition of a language constraint increases the average ability of new hires. But an increase in capacity lowers it. We test these predictions in a laboratory of European universities’ economics and business academe. Leveraging a staggered difference-in-differences design, we show that when universities introduce English-taught degree programs, the number of new hires and their average ability—measured by top-quartile publications—rises substantially. After the switch European universities increase their size to that of the US control group. These gains must be weighed against potential costs related to cultural preservation and native-language labor supply.