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

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  • 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
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    References listed on IDEAS

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    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).

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    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

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