IDEAS home Printed from https://ideas.repec.org/a/rrs/journl/v17y2023i1p1-37.html
   My bibliography  Save this article

Differences in Heterogeneous Returns to Foreign Language Use at Work Among Natives and Migrants in Europe

Author

Listed:
  • Zhiling Wang

    (Erasmus University Rotterdam and Tinbergen Institute, Amsterdam)

  • Thomas de Graaff

    (Free University, Amsterdam and Tinbergen Institute, Amsterdam)

  • Peter Nijkamp

    (Open University, Heerlen, the Netherlands)

Abstract

The cultural-demographic profile of Europe has been heavily influenced by migration dynamics over the past decades. The question is whether language diversity in a host country – in particular, language proficiency and foreign language use at work – has implications for the workers’ wages. Our study examines the heterogeneous impacts of foreign language use at work on earnings of both native-born workers and foreign-born workers. To that end, a Mincer earnings equation is specified. The model is tested by means of an extensive data set that captures all relevant variables. Despite the dated nature of the data used, several interesting outcomes on wage differentials in Europe – as a result of foreign language use at work – are found. First, for native-born workers with a tertiary diploma, using a foreign language at work is found to have an unambiguously positive impact on their earnings (2%). Second, for foreign-born workers, returns to foreign language use at work is highly complementary to education. Foreign language users below the upper secondary educational level earn significantly less (−8%) than those who use the local language at work. Third, a linguistically distant foreign language gives native-born workers the highest wage premium, while the use of EU official languages pays off the most for foreign-born workers. Fourth, our results do not show evidence that the lack of local language knowledge of low-educated migrants causes these results, as immigrants for whom the mother tongue is similar to the local language show similar outcome.

Suggested Citation

  • 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.
  • Handle: RePEc:rrs:journl:v:17:y:2023:i:1:p:1-37
    as

    Download full text from publisher

    File URL: https://rjrs.ase.ro/wp-content/uploads/2017/03/V171/V1711.WangZ.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. 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.
    2. Victor Ginsburgh & Shlomo Weber, 2020. "The Economics of Language," Journal of Economic Literature, American Economic Association, vol. 58(2), pages 348-404, June.
    3. Francesco Fasani & Tommaso Frattini & Luigi Minale, 2022. "(The Struggle for) Refugee integration into the labour market: evidence from Europe [Cashier or consultant? Entry labor market conditions, field of study, and career success]," Journal of Economic Geography, Oxford University Press, vol. 22(2), pages 351-393.
    4. 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 246-288, April.
    5. Victor Ginsburgh & Ignacio Ortuño-Ortín & Shlomo Weber, 2005. "Disenfranchisement In Linguistically Diverse Societies: The Case Of The European Union," Journal of the European Economic Association, MIT Press, vol. 3(4), pages 946-965, June.
    6. Andrew Henley & Rhian Eleri Jones, 2005. "Earnings And Linguistic Proficiency In A Bilingual Economy," Manchester School, University of Manchester, vol. 73(3), pages 300-320, June.
    7. Ingo E. Isphording, 2013. "Returns to Foreign Language Skills of Immigrants in Spain," LABOUR, CEIS, vol. 27(4), pages 443-461, December.
    8. Edward P. Lazear, 1999. "Culture and Language," Journal of Political Economy, University of Chicago Press, vol. 107(S6), pages 95-126, December.
    9. Albert Saiz & Elena Zoido, 2005. "Listening to What the World Says: Bilingualism and Earnings in the United States," The Review of Economics and Statistics, MIT Press, vol. 87(3), pages 523-538, August.
    10. Stöhr, Tobias, 2015. "The returns to occupational foreign language use: Evidence from Germany," Labour Economics, Elsevier, vol. 32(C), pages 86-98.
    11. Isphording, Ingo, 2013. "Returns to Local and Foreign Language Skills – Causal Evidence from Spain," Ruhr Economic Papers 398, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    12. Victor Ginsburgh & Juan D. Moreno‐Ternero, 2018. "Compensation schemes for learning a Lingua Franca in the European Union," The World Economy, Wiley Blackwell, vol. 41(7), pages 1775-1789, July.
    13. Victor A. Ginsburgh & Juan Prieto-Rodriguez, 2011. "Returns to Foreign Languages of Native Workers in the European Union," ILR Review, Cornell University, ILR School, vol. 64(3), pages 599-618, April.
    14. Isphording, Ingo E. & Otten, Sebastian, 2014. "Linguistic barriers in the destination language acquisition of immigrants," Journal of Economic Behavior & Organization, Elsevier, vol. 105(C), pages 30-50.
    15. Davidson, Russell & MacKinnon, James G., 1993. "Estimation and Inference in Econometrics," OUP Catalogue, Oxford University Press, number 9780195060119, Decembrie.
    16. Alícia Adserà & Mariola Pytliková, 2015. "The Role of Language in Shaping International Migration," Economic Journal, Royal Economic Society, vol. 125(586), pages 49-81, August.
    17. Victor Ginsburgh & Shlomo Weber, 2011. "How Many Languages Do We Need? The Economics of Linguistic Diversity," Economics Books, Princeton University Press, edition 1, number 9481.
    18. Christian Dustmann & Arthur Van Soest, 2002. "Language and the Earnings of Immigrants," ILR Review, Cornell University, ILR School, vol. 55(3), pages 473-492, April.
    19. Lang Kevin & Siniver Erez, 2009. "The Return to English in a Non-English Speaking Country: Russian Immigrants and Native Israelis in Israel," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 9(1), pages 1-30, November.
    20. Melitz, Jacques, 2008. "Language and foreign trade," European Economic Review, Elsevier, vol. 52(4), pages 667-699, May.
    21. Ingo Eduard Isphording & Sebastian Otten, 2013. "The Costs of Babylon—Linguistic Distance in Applied Economics," Review of International Economics, Wiley Blackwell, vol. 21(2), pages 354-369, May.
    22. Brian Fabo & Miroslav Beblavý & Karolien Lenaerts, 2017. "The importance of foreign language skills in the labour markets of Central and Eastern Europe: assessment based on data from online job portals," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 44(3), pages 487-508, August.
    23. Raymond J G M Florax & Thomas de Graaff & Brigitte S Waldorf, 2005. "A Spatial Economic Perspective on Language Acquisition: Segregation, Networking, and Assimilation of Immigrants," Environment and Planning A, , vol. 37(10), pages 1877-1897, October.
    24. Ku, Hyejin & Zussman, Asaf, 2010. "Lingua franca: The role of English in international trade," Journal of Economic Behavior & Organization, Elsevier, vol. 75(2), pages 250-260, August.
    25. Julia Beckhusen & Raymond J.G.M. Florax & Thomas Graaff & Jacques Poot & Brigitte Waldorf, 2013. "Living and working in ethnic enclaves: English Language proficiency of immigrants in US metropolitan areas," Papers in Regional Science, Wiley Blackwell, vol. 92(2), pages 305-328, June.
    26. Donald R. Williams, 2011. "Multiple language usage and earnings in Western Europe," International Journal of Manpower, Emerald Group Publishing Limited, vol. 32(4), pages 372-393, July.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Wang, Zhiling & de Graaff, Thomas & Nijkamp, Peter, 2017. "Look Who’s Talking: On the Heterogeneous Returns to Foreign Language Use at Work among Natives and Migrants in Europe," GLO Discussion Paper Series 104, Global Labor Organization (GLO).
    2. 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.
    3. 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.
    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. Jacek Liwiński, 2019. "The wage premium from foreign language skills," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 46(4), pages 691-711, November.
    6. Wang, Haining & Cheng, Zhiming & Smyth, Russell, 2016. "Language and consumption," China Economic Review, Elsevier, vol. 40(C), pages 135-151.
    7. Victor Ginsburgh & Shlomo Weber, 2020. "The Economics of Language," Journal of Economic Literature, American Economic Association, vol. 58(2), pages 348-404, June.
    8. Hahm, Sabrina & Gazzola, Michele, 2022. "The Value of Foreign Language Skills in the German Labor Market," Labour Economics, Elsevier, vol. 76(C).
    9. 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.
    10. Alejandro Donado, 2017. "Foreign Languages and their Impact on Unemployment," LABOUR, CEIS, vol. 31(3), pages 265-287, September.
    11. Melitz, Jacques & Toubal, Farid, 2014. "Native language, spoken language, translation and trade," Journal of International Economics, Elsevier, vol. 93(2), pages 351-363.
    12. Chiswick, Barry R. & Miller, Paul W., 2014. "International Migration and the Economics of Language," IZA Discussion Papers 7880, Institute of Labor Economics (IZA).
    13. Donado, Alejandro, 2014. "Foreign Languages and their Impact on Income and Unemployment," VfS Annual Conference 2014 (Hamburg): Evidence-based Economic Policy 100288, Verein für Socialpolitik / German Economic Association.
    14. Ingo E. Isphording, 2013. "Returns to Foreign Language Skills of Immigrants in Spain," LABOUR, CEIS, vol. 27(4), pages 443-461, December.
    15. Isphording, Ingo E., 2014. "Language and Labor Market Success," IZA Discussion Papers 8572, Institute of Labor Economics (IZA).
    16. Stöhr, Tobias, 2015. "The returns to occupational foreign language use: Evidence from Germany," Labour Economics, Elsevier, vol. 32(C), pages 86-98.
    17. Antonio Paolo & Aysit Tansel, 2019. "English skills, labour market status and earnings of Turkish women," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 46(4), pages 669-690, November.
    18. Victor Ginsburgh & Juan Prieto-Rodriguez, 2013. "Is there a Gender Bias in the Use of Foreign Languages in Europe?," Kyklos, Wiley Blackwell, vol. 66(4), pages 552-566, November.
    19. Antonio Di Paolo & Aysit Tansel, 2019. "“English skills, labour market status and earnings of Turkish women”," AQR Working Papers 201901, University of Barcelona, Regional Quantitative Analysis Group, revised Jan 2019.
    20. 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.

    More about this item

    Keywords

    foreign language at work; earnings; native-born;
    All these keywords.

    JEL classification:

    • 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

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:rrs:journl:v:17:y:2023:i:1:p:1-37. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Bogdan-Vasile Ileanu (email available below). General contact details of provider: .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.