Language Fluency and Earnings: Estimation with Misclassified Language Indicators
AbstractWe use panel data from the German Socio Economic Panel to estimate the determinants of language fluency of immigrants, and its impact on earnings. Self reported measures of language proficiency contain substantial reporting errors. We specify a panel data model which takes explicitly account of misclassification. We extend the existing literature on misclassification of categorical dependent variables by distinguishing between time persistent and time varying misclassification errors, using panel data. The repeated information on language fluency allows us also to distinguish between cohort effects and exposure effects. We then add a wage equation to the model and estimate it jointly with the speaking fluency equation. In this way, we take account of the two problems that may bias OLS estimates: misclassification errors and correlated unobserved individual heterogeneity in wages and speaking fluency. We nd that both have important consequences for the estimated effect of speaking fluency on earnings.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Tilburg University, Center for Economic Research in its series Discussion Paper with number 1998-120.
Date of creation: 1998
Date of revision:
Contact details of provider:
Web page: http://center.uvt.nl
panel data; wages; foreign workers;
Other versions of this item:
- 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.
- C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
- J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
This paper has been announced in the following NEP Reports:
- NEP-ALL-1999-03-08 (All new papers)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Gilles Grenier, 1984. "The Effects of Language Characteristics on the Wages of Hispanic-American Males," Journal of Human Resources, University of Wisconsin Press, vol. 19(1), pages 35-52.
- George J. Borjas, 1994. "The Economics of Immigration," Journal of Economic Literature, American Economic Association, vol. 32(4), pages 1667-1717, December.
- Chiswick, Barry R & Miller, Paul W, 1995. "The Endogeneity between Language and Earnings: International Analyses," Journal of Labor Economics, University of Chicago Press, vol. 13(2), pages 246-88, April.
- Geoffrey Carliner, 1981. "Wage Differences by Language Group and the Market for Language Skills in Canada," Journal of Human Resources, University of Wisconsin Press, vol. 16(3), pages 384-399.
This item has more than 25 citations. To prevent cluttering this page, these citations are listed on a separate page. reading list or among the top items on IDEAS.Access and download statisticsgeneral information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Richard Broekman).
If references are entirely missing, you can add them using this form.