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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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    More about this item

    Keywords

    language; earnings; immigrants; endogeneity; complementarity;
    All these keywords.

    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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