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“Returns to Foreign Language Skills in a Developing Country: The Case of Turkey”

  • Antonio Di Paolo

    ()

    (Faculty of Economics, University of Barcelona)

  • Aysit Tansel

    ()

    (Middle East Technical University)

Foreign language skills represent a form of human capital that can be rewarded in the labor market. Drawing on data from the Adult Education Survey of 2007, this is the first study estimating returns to foreign language skills in Turkey. We contribute to the literature on the economic value of language knowledge, with a special focus on a country characterized by fast economic and social development. Although English is the most widely spoken foreign language in Turkey, we initially consider the economic value of different foreign languages among the employed males aged 25 to 65. We find positive and significant returns to proficiency in English and Russian, which increase with the level of competence. Knowledge of French and German also appears to be positively rewarded in the Turkish labor market, although their economic value seems mostly linked to an increased likelihood to hold specific occupations rather than increased earnings within occupations. Focusing on English, we also explore the heterogeneity in returns to different levels of proficiency by frequency of English use at work, birth-cohort, education, occupation and rural/urban location. The results are also robust to the endogenous specification of English language skills. The findings suggest that specific programs to adapt immigrants’ human capital acquired in home country are required to reduce differences in the incidence of skill mismatch and a better integration in the EU labour markets.

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Paper provided by University of Barcelona, Regional Quantitative Analysis Group in its series AQR Working Papers with number 201311.

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Length: 63 pages
Date of creation: Nov 2013
Date of revision: Nov 2013
Handle: RePEc:aqr:wpaper:201311
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