Over-Education in Multilingual Economies: Evidence from Catalonia

Individuals with deficient language skills may compensate for this disadvantage in the labor market by acquiring more formal skills. Catalonia's economy is characterized by linguistic diversity and provides thereby a unique opportunity to measure the incidence of language proficiency on over-education. Catalan language, formerly confined to informal uses, became co-official with Spanish and the language of instruction in the early eighties. This change, however, did not undermine the intensive use of Castilian in most spheres of communication. Descriptive evidence seems to suggest that individuals with better language knowledge are more likely to be over-educated. This can lead us to think, as is usually the case in the public discussions, that individuals who are not fluent in the language of instruction tend to under-educate, since they are discouraged to attend school. However, once we estimate a model that controls for individuals' socio-demographic characteristics, the opposite emerges: language knowledge is shown to have in fact a negative effect on over-education. This effect, although robust to accounting for endogeneity of language knowledge and significant at the individual level, is mostly non-significant on average.