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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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  • Antonio Di Paolo & Josep Lluís Raymond, 2012. "Language knowledge and earnings in Catalonia," Journal of Applied Economics, Universidad del CEMA, vol. 15, pages 89-118, May.
  • Handle: RePEc:cem:jaecon:v:15:y:2012:n:1:p:89-118
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    1. Esther Vayá & José Ramón García & Joaquim Murillo & Javier Romaní & Jordi Suriñach, 2016. "“Economic Impact of Cruise Activity: The Port of Barcelona”," AQR Working Papers 201609, University of Barcelona, Regional Quantitative Analysis Group, revised Nov 2016.
    2. 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.
    3. Bonin, Holger, 2017. "Report No. 75: The Potential Economic Benefits of Education of Migrants in the EU," IZA Research Reports 75, Institute for the Study of Labor (IZA).
    4. Jan C. van Ours & Yuxin Yao, 2016. "The Wage Penalty of Dialect-Speaking," Tinbergen Institute Discussion Papers 16-091/V, Tinbergen Institute.
    5. Anna Castañer & Mª Mercè Claramunt & Alba Tadeo & Javier Varea, 2016. "Modelización de la dependencia del número de siniestros. Aplicación a Solvencia II," Working Papers XREAP2016-01, Xarxa de Referència en Economia Aplicada (XREAP), revised Sep 2016.
    6. Ramon Caminal, 2013. "The economic value of reciprocal bilingualism," UFAE and IAE Working Papers 933.13, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC).
    7. Anna Castañer & Mª Mercè Claramunt, 2014. "Optimal stop-loss reinsurance: a dependence analysis," Working Papers XREAP2014-04, Xarxa de Referència en Economia Aplicada (XREAP), revised Apr 2014.
    8. Yao, Yuxin & Ohinata, Asako & van Ours, Jan, 2016. "The Education Consequences of Language Proficiency for Young Children," Discussion Paper 2016-009, Tilburg University, Center for Economic Research.
    9. Yao, Yuxin & van Ours, Jan C., 2015. "Language skills and labor market performance of immigrants in the Netherlands," Labour Economics, Elsevier, vol. 34(C), pages 76-85.
    10. Yuxin Yao & Jan C. van Ours, 2015. "Language Skills and Labor Market Performance of Immigrants in the Netherlands," CReAM Discussion Paper Series 1505, Centre for Research and Analysis of Migration (CReAM), Department of Economics, University College London.
    11. Sprietsma, Maresa & Pfeil, Lisa, 2015. "Peer effects in language training for migrants," ZEW Discussion Papers 15-033, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
    12. 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.
    13. Yao, Yuxin & Ohinata, Asako & van Ours, Jan C., 2016. "The educational consequences of language proficiency for young children," Economics of Education Review, Elsevier, vol. 54(C), pages 1-15.
    14. De Paola, Maria & Brunello, Giorgio, 2016. "Education as a Tool for the Economic Integration of Migrants," IZA Discussion Papers 9836, Institute for the Study of Labor (IZA).
    15. van Ours, Jan C. & Yao, Yuxin, 2016. "The Wage Penalty of Dialect-Speaking," CEPR Discussion Papers 11610, C.E.P.R. Discussion Papers.
    16. Mercedes Ayuso & Montserrat Guillén & Jens Perch Nielsen, 2016. "Improving automobile insurance ratemaking using telematics: incorporating mileage and driver behaviour data," Working Papers XREAP2016-08, Xarxa de Referència en Economia Aplicada (XREAP), revised Dec 2016.
    17. 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).
    18. Antonio di Paolo, 2011. "Knowledge of catalan, public/prívate sector choice and earnings: Evidence from a double sample selection model," Hacienda Pública Española, IEF, vol. 197(2), pages 9-35, June.
    19. Ohinata, Asako & van Ours, Jan C. & Yao, Yuxin, 2016. "The Educational Consequences of Language Proficiency for Young Children," CEPR Discussion Papers 11183, C.E.P.R. Discussion Papers.
    20. Catalina Bolancé & Zuhair Bahraoui & Ramon Alemany, 2015. "Estimating extreme value cumulative distribution functions using bias-corrected kernel approaches," Working Papers XREAP2015-01, Xarxa de Referència en Economia Aplicada (XREAP), revised Jan 2015.
    21. Antonio Manresa & Ferran Sancho, 2012. "Leontief versus Ghosh: two faces of the same coin," Working Papers XREAP2012-18, Xarxa de Referència en Economia Aplicada (XREAP), revised Oct 2012.

    More about this item

    Keywords

    language; earnings; immigrants; endogeneity; complementarity;

    JEL classification:

    • J79 - Labor and Demographic Economics - - Labor Discrimination - - - Other
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
    • C31 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models; Quantile Regressions; Social Interaction Models

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