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Language knowledge and earnings in Catalonia

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Abstract

This paper represents the first contribution that investigates the economic value of Catalan knowledge in terms of earnings, focusing on national and foreign first- and second-generation immigrants in Catalonia. Specifically, drawing on data from the Survey on Living Conditions and Habits of the Catalan Population (2006), we quantify the expected earnings differential between individuals who are proficient in Catalan and those who are not, taking into account the potential endogeneity between knowledge of Catalan and earnings. The results indicate the existence of a positive return to knowledge of Catalan, with a 7.5% increase in earnings estimated by OLS. When we account for the presence of endogeneity, monthly earnings are around 18% higher for individuals who are able to speak and write Catalan. We also find that language and education are complementary inputs for generating earnings in Catalonia, given that knowledge of Catalan increases monthly earnings only for more educated individuals.

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Bibliographic Info

Article provided by Universidad del CEMA in its journal Journal of Applied Economics.

Volume (Year): XV (2012)
Issue (Month): (May)
Pages: 89-118

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Handle: RePEc:cem:jaecon:v:15:y:2012:n:1:p:89-118

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Keywords: language; earnings; immigrants; endogeneity; complementarity;

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Cited by:
  1. Antonio Di Paolo & Aysit Tansel, 2013. "Returns to Foreign Language Skills in a Developing Country: The Case of Turkey," Koç University-TUSIAD Economic Research Forum Working Papers, Koc University-TUSIAD Economic Research Forum 1322, Koc University-TUSIAD Economic Research Forum.
  2. Ramon Caminal, 2013. "The economic value of reciprocal bilingualism," UFAE and IAE Working Papers, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC) 933.13, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC).
  3. Anna Castañer & Mª Mercè Claramunt, 2014. "Optimal stop-loss reinsurance: a dependence analysis," Working Papers, Xarxa de Referència en Economia Aplicada (XREAP) XREAP2014-04, Xarxa de Referència en Economia Aplicada (XREAP), revised Apr 2014.
  4. Ramon Caminal, 2013. "The Economic Value of Reciprocal Bilingualism," Working Papers, Barcelona Graduate School of Economics 713, Barcelona Graduate School of Economics.
  5. Budría, Santiago & Swedberg, Pablo, 2012. "The Impact of Language Proficiency on Immigrants' Earnings in Spain," IZA Discussion Papers 6957, Institute for the Study of Labor (IZA).
  6. Antonio Manresa & Ferran Sancho, 2012. "Leontief versus Ghosh: two faces of the same coin," Working Papers, Xarxa de Referència en Economia Aplicada (XREAP) XREAP2012-18, Xarxa de Referència en Economia Aplicada (XREAP), revised Oct 2012.
  7. Antonio Di Paolo, 2010. "Knowledge of Catalan, public/private sector choice and earnings: Evidence from a double sample selection model," Working Papers, Xarxa de Referència en Economia Aplicada (XREAP) XREAP2010-09, Xarxa de Referència en Economia Aplicada (XREAP), revised Sep 2010.

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