IDEAS home Printed from https://ideas.repec.org/a/bpj/bejeap/v18y2018i4p19n7.html
   My bibliography  Save this article

The Impact of Language Skills on Immigrants’ Labor Market Integration: A Brief Revision With a New Approach

Author

Listed:
  • Schuss Eric

    (Faculty of Business Administration and Economics, Chair of Public Economics, University of Duisburg-Essen, Weststadttürme Berliner Platz 6-8, 45127Essen, Germany)

Abstract

I examine the impact of language skills on immigrants’ labor market performance by applying a new approach, which allows to estimate wage benefits attributed to initial language skills at arrival. By exploiting unique data, I isolate the endogenous part of current German skills and instrument current command by German proficiency measured retrospectively at the point in time of migration. This approach tackles the problem that labor market effects from current language skills are at risk to reflect merely the sum of a successful residence in Germany and only display growth effects. I find that a good command of German increases labor market income by 47.0% for males, while no significant language effects are detected for females. Further analyses illustrate that differences in language effects by gender can be attributed to selection into different occupations and part-time employments and that language operates complementary and enables cross-border transferability of human capital.

Suggested Citation

  • Schuss Eric, 2018. "The Impact of Language Skills on Immigrants’ Labor Market Integration: A Brief Revision With a New Approach," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 18(4), pages 1-19, October.
    • Handle: RePEc:bpj:bejeap:v:18:y:2018:i:4:p:19:n:7
    DOI: 10.1515/bejeap-2017-0280
    as

    Download full text from publisher

    File URL: https://doi.org/10.1515/bejeap-2017-0280
    Download Restriction: For access to full text, subscription to the journal or payment for the individual article is required.
    File URL: https://libkey.io/10.1515/bejeap-2017-0280?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Christian Dustmann & Arthur van Soest, 2001. "Language Fluency And Earnings: Estimation With Misclassified Language Indicators," The Review of Economics and Statistics, MIT Press, vol. 83(4), pages 663-674, November.
    2. Erik Hanushek & Stephen Machin & Ludger Woessmann (ed.), 2011. "Handbook of the Economics of Education," Handbook of the Economics of Education, Elsevier, edition 1, volume 4, number 4, June.
    3. Christian Dustmann & Francesca Fabbri, 2003. "Language proficiency and labour market performance of immigrants in the UK," Economic Journal, Royal Economic Society, vol. 113(489), pages 695-717, July.
    4. Lang Kevin & Siniver Erez, 2009. "The Return to English in a Non-English Speaking Country: Russian Immigrants and Native Israelis in Israel," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 9(1), pages 1-30, November.
    5. Hoyt Bleakley & Aimee Chin, 2010. "Age at Arrival, English Proficiency, and Social Assimilation among US Immigrants," American Economic Journal: Applied Economics, American Economic Association, vol. 2(1), pages 165-192, January.
    6. Kenneth Clark & Stephen Drinkwater, 2002. "Enclaves, neighbourhood effects and employment outcomes: Ethnic minorities in England and Wales," Journal of Population Economics, Springer;European Society for Population Economics, vol. 15(1), pages 5-29.
    7. Schuß, Eric, 2016. "Between Life Cycle Model, Labor Market Integration and Discrimination: An Econometric Analysis of the Determinants of Return Migration," VfS Annual Conference 2016 (Augsburg): Demographic Change 145538, Verein für Socialpolitik / German Economic Association.
    8. Joanne Lindley, 2002. "The English Language Fluency And Earnings Of Ethnic Minorities In Britain," Scottish Journal of Political Economy, Scottish Economic Society, vol. 49(4), pages 467-487, September.
    9. Dustmann, Christian & Glitz, Albrecht, 2011. "Migration and Education," Handbook of the Economics of Education, in: Erik Hanushek & Stephen Machin & Ludger Woessmann (ed.), Handbook of the Economics of Education, edition 1, volume 4, chapter 0, pages 327-439, Elsevier.
    10. Lochmann, Alexia & Rapoport, Hillel & Speciale, Biagio, 2019. "The effect of language training on immigrants’ economic integration: Empirical evidence from France," European Economic Review, Elsevier, vol. 113(C), pages 265-296.
    11. Esteban Sanromà & Raúl Ramos & Hipólito Simón, 2009. "Immigrant wages in the Spanish labour market: does the origin of human capital matter?," Working Papers 2009/8, Institut d'Economia de Barcelona (IEB).
    12. Dustmann C. & Van Soest A., 2004. "An Analysis of Speaking Fluency of Immigrants Using Ordered Response Models With Classification Errors," Journal of Business & Economic Statistics, American Statistical Association, vol. 22, pages 312-321, July.
    13. Sanromá, Esteban & Ramos, Raul & Simón, Hipólito, 2009. "Immigrant Wages in the Spanish Labour Market: Does the Origin of Human Capital Matter?," IZA Discussion Papers 4157, Institute for the Study of Labor (IZA).
    14. Joshua D. Angrist & Jörn-Steffen Pischke, 2009. "Mostly Harmless Econometrics: An Empiricist's Companion," Economics Books, Princeton University Press, edition 1, number 8769.
    15. Eric Schuss, 2016. "Between Life Cycle Model, Labor Market Integration and Discrimination: An Econometric Analysis of the Determinants of Return Migration," SOEPpapers on Multidisciplinary Panel Data Research 881, DIW Berlin, The German Socio-Economic Panel (SOEP).
    16. Hoyt Bleakley & Aimee Chin, 2004. "Language Skills and Earnings: Evidence from Childhood Immigrants," The Review of Economics and Statistics, MIT Press, vol. 86(2), pages 481-496, May.
    17. Sanromá, Esteban & Ramos, Raul & Simón, Hipólito, 2008. "The Portability of Human Capital and Immigrant Assimilation: Evidence for Spain," IZA Discussion Papers 3649, Institute of Labor Economics (IZA).
    18. Ilana Redstone Akresh, 2008. "Occupational Trajectories of Legal US Immigrants: Downgrading and Recovery," Population and Development Review, The Population Council, Inc., vol. 34(3), pages 435-456, September.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Jaschke, Philipp & Keita, Sekou, 2019. "Spracherwerb vor der Zuwanderung: Förderung von Deutschkursen im Ausland lohnt sich (Language acquisition before immigration: Promotion of German courses abroad pays off)," IAB-Kurzbericht 201921, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    2. Jaschke, Philipp & Keita, Sekou, 2021. "Say it like Goethe: Language learning facilities abroad and the self-selection of immigrants," Journal of Development Economics, Elsevier, vol. 149(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Antonio Di Paolo & Aysit Tansel, 2015. "Returns to Foreign Language Skills in a Developing Country: The Case of Turkey," Journal of Development Studies, Taylor & Francis Journals, vol. 51(4), pages 407-421, April.
    2. Dustmann, Christian & Glitz, Albrecht, 2011. "Migration and Education," Handbook of the Economics of Education, in: Erik Hanushek & Stephen Machin & Ludger Woessmann (ed.), Handbook of the Economics of Education, edition 1, volume 4, chapter 0, pages 327-439, Elsevier.
    3. Bonin, Holger, 2017. "The Potential Economic Benefits of Education of Migrants in the EU," IZA Research Reports 75, Institute of Labor Economics (IZA).
    4. Giesecke, Matthias & Schuß, Eric, 2019. "Heterogeneity in marginal returns to language training of immigrants," IAB-Discussion Paper 201919, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    5. De Paola, Maria & Brunello, Giorgio, 2016. "Education as a Tool for the Economic Integration of Migrants," IZA Discussion Papers 9836, Institute of Labor Economics (IZA).
    6. Antonio Di Paolo & Aysit Tansel, 2015. "Returns to Foreign Language Skills in a Developing Country: The Case of Turkey," Journal of Development Studies, Taylor & Francis Journals, vol. 51(4), pages 407-421, April.
    7. Antonio Di Paolo & Josep Lluís Raymond, 2012. "Language Knowledge and Earnings in Catalonia," Journal of Applied Economics, Taylor & Francis Journals, vol. 15(1), pages 89-118, May.
    8. Jacob Nielsen Arendt & Christian Dustmann & Hyejin Ku, 2022. "Refugee migration and the labour market: lessons from 40 years of post-arrival policies in Denmark," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 38(3), pages 531-556.
    9. Aoki, Yu & Santiago, Lualhati, 2018. "Deprivation, Segregation, and Socioeconomic Class of UK Immigrants: Does English Proficiency Matter?," IZA Discussion Papers 11368, Institute of Labor Economics (IZA).
    10. Foged, Mette & van der Werf, Cynthia, 2023. "Access to language training and the local integration of refugees," Labour Economics, Elsevier, vol. 84(C).
    11. Yao, Yuxin, 2017. "Essays on economics of language and family economics," Other publications TiSEM 0093bc8e-e869-4f87-8ff8-8, Tilburg University, School of Economics and Management.
    12. L. Pieroni & G. d’Agostino & D. Lanari & M. Scarlato, 2024. "Immigrant Labour Market Outcomes: New Insights from a Lack of Language Proficiency in Italy," Italian Economic Journal: A Continuation of Rivista Italiana degli Economisti and Giornale degli Economisti, Springer;Società Italiana degli Economisti (Italian Economic Association), vol. 10(1), pages 293-327, March.
    13. Jens Ruhose, 2015. "Microeconometric Analyses on Economic Consequences of Selective Migration," ifo Beiträge zur Wirtschaftsforschung, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, number 61.
    14. Lochmann, Alexia & Rapoport, Hillel & Speciale, Biagio, 2019. "The effect of language training on immigrants’ economic integration: Empirical evidence from France," European Economic Review, Elsevier, vol. 113(C), pages 265-296.
    15. Yao, Y. & van Ours, J.C., 2015. "Language Skills and Labor Market Performance of Immigrants in the Netherlands," Discussion Paper 2015-010, Tilburg University, Center for Economic Research.
    16. Yao, Y. & van Ours, J.C., 2015. "Language Skills and Labor Market Performance of Immigrants in the Netherlands," Discussion Paper 2015-010, Tilburg University, Center for Economic Research.
    17. Pieroni, Luca & d'Agostino, Giorgio & Lanari, Donatella, 2019. "The effects of language skills on immigrant employment and wages in Italy," MPRA Paper 91725, University Library of Munich, Germany.
    18. Wang, Haining & Cheng, Zhiming & Smyth, Russell, 2016. "Language and consumption," China Economic Review, Elsevier, vol. 40(C), pages 135-151.
    19. Santiago Budría & Alberto Colino & Carlos Martínez de Ibarreta, 2019. "The impact of host language proficiency on employment outcomes among immigrants in Spain," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 46(4), pages 625-652, November.
    20. Hahm, Sabrina & Gazzola, Michele, 2022. "The Value of Foreign Language Skills in the German Labor Market," Labour Economics, Elsevier, vol. 76(C).

    More about this item

    Keywords

    transferability of human capital; complementarity of language skills; immigrants; labor market performance;
    All these keywords.

    JEL classification:

    • C26 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Instrumental Variables (IV) Estimation
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bpj:bejeap:v:18:y:2018:i:4:p:19:n:7. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Peter Golla (email available below). General contact details of provider: https://www.degruyter.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.