Language Usage, Participation, Employment and Earnings
Language ability may not only affect the earnings of the individual, but the participation to participate in the labor market or becoming employed as well. It may also affect selection of people into economic sectors and occupation. In this paper the effects of language ability on earnings are analyzed for foreigners in Germany with joint consideration of up to four types of self-selection. The results show that language profciency signifcantly increases participation and employment probability and affects earnings directly. However, when self-selection into economic sectors and occupation is regarded, the direct effects of language ability on earnings vanish.
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