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The returns to occupational foreign language use: Evidence from Germany

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  • Stöhr, Tobias

Abstract

This paper analyzes the wage premia associated with workers' occupational use of foreign languages in Germany. After eliminating time-invariant unobserved heterogeneity and other confounding factors, sizable returns of about 0.12 log points to applying fluent English skills are found in the general population, while the point estimate for immigrants is 0.26 log points. Returns to occupational use of other foreign languages are, if anything, restricted to a few specialized occupations. I find evidence that the particularly large returns of immigrants originate in parts of the service sector that are linked to imports and exports. As immigrants do not earn significant wage premia for applying their native language on the job in addition to those for English, any trade-fostering potential of immigrants is more likely to be unlocked by complementary fluency in the two business languages German and English.

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  • Stöhr, Tobias, 2015. "The returns to occupational foreign language use: Evidence from Germany," Labour Economics, Elsevier, vol. 32(C), pages 86-98.
    • Handle: RePEc:eee:labeco:v:32:y:2015:i:c:p:86-98
    DOI: 10.1016/j.labeco.2015.01.004
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    Cited by:

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    3. Sorrenti, Giuseppe, 2017. "The Spanish or the German apartment? Study abroad and the acquisition of permanent skills," Economics of Education Review, Elsevier, vol. 60(C), pages 142-158.
    4. Wang, Haining & Smyth, Russell & Cheng, Zhiming, 2017. "The economic returns to proficiency in English in China," China Economic Review, Elsevier, vol. 43(C), pages 91-104.
    5. Zhiling Wang & Thomas de Graaff & Peter Nijkamp, 2018. "Barriers of Culture, Networks, and Language in International Migration: A Review," REGION, European Regional Science Association, vol. 5, pages 73-89.
    6. Zhiling Wang & Thomas de Graaff & Peter Nijkamp, 2023. "Differences in Heterogeneous Returns to Foreign Language Use at Work Among Natives and Migrants in Europe," Romanian Journal of Regional Science, Romanian Regional Science Association, vol. 17(1), pages 1-37, June.

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    More about this item

    Keywords

    Foreign language skills; Migration; Wage structure; Human capital; Occupational choice;
    All these keywords.

    JEL classification:

    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General

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    1. The returns to occupational foreign language use: Evidence from Germany (LE 2015) in ReplicationWiki

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