Official language proficiency and immigrant labour market outcomes: Evidence from test-based multidimensional measures of language skills

Quality of life and well-being research often involves survey content that is subjective in nature, for example, questions pertaining to life satisfaction. Two phenomena impacting responses to self-reported life satisfaction are studied across a range of social surveys: the framing effect, where a respondent’s answer is influenced by the theme of the survey or its content; and the mode effect, where a respondent’s answer is influenced by the method in which survey data are collected (with an interviewer, through an online collection portal, etc.). The impact of these effects on life satisfaction responses is measured across three Statistics Canada survey series: the General Social Survey (GSS), the Canadian Community Health Survey (CCHS) and the Canadian Social Survey. The GSS uses a different theme each year that fits into one of four categories and serves as the main source of variation in survey theNumerous studies have demonstrated that higher proficiency in the language spoken in the destination country improves immigrant labour market outcomes. However, because of a lack of objective measures of language skills, previous studies have mainly drawn on subjective measures of language proficiency and were confined to the effect of only one dimension or general language skills. This study examines the effects of test-based measures of official language proficiency in four dimensions—listening, speaking, reading and writing—on immigrant employment and earnings. The analysis focuses on economic principal applicants admitted through the Express Entry (EE) system who immigrated to Canada from 2015 to 2018. A self-reported language measure based on self-reported knowledge of official languages at immigration and mother tongue is also examined for comparison. The analysis of employment outcomes shows that in the initial years after immigration, test-based language measures in all four dimensions, as well as the self-reported language measure, had little effect on the incidence of employment. The analysis of earnings, however, shows that the predictive power and the marginal effect of each of the four dimensions of test-based language measures were much stronger than those of the self-reported measure, indicating that using the latter can considerably underestimate the effect of language skills on earnings. The four test-based measures of official language skills all had independent positive effects on earnings. Reading tended to have a stronger predictive power and a larger marginal effect than the other three dimensions, but the differences across the four dimensions were generally small. The tested official language skills were as important as pre-immigration Canadian work experience and more important than the educational level and age at immigration in predicting initial earnings of principal applicants admitted under the EE system.me. Significant framing effects are observed for each theme of the GSS relative to the CCHS, and they explain a large portion of between-year variations in average self-reported life satisfaction. A mode effect is also observed for electronic questionnaire collection relative to computer-assisted telephone interviews. Differences in life satisfaction scores across a variety of demographic concepts are also presented.