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Language Fluency and Earnings : Estimation with Misclassified Language Indicators

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  • Dustmann, C.
  • van Soest, A.H.O.

    (Tilburg University, Center For Economic Research)

Abstract

We use panel data to analyze the determinants of speaking fluency and wages of immigrants. Our model takes account of two problems that may bias OLS estimates of the impact of speaking fluency on earnings. First, subjective variables on an ordinal discrete scale, such as self-reported language ability, can suffer from misclassification errors. The model decomposes misclassification errors into a time-persistent and a time-varying component. Second, the model accounts for correlated unobserved heterogeneity in language and earnings equation. The main finding is that these two generalizations of the standard model both lead to substantial changes in the estimated effect of speaking fluency on earnings. © 2001 by the President and Fellows of Harvard College and the Massachusetts Institute of Technology
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Suggested Citation

  • Dustmann, C. & van Soest, A.H.O., 1998. "Language Fluency and Earnings : Estimation with Misclassified Language Indicators," Discussion Paper 1998-120, Tilburg University, Center for Economic Research.
    • Handle: RePEc:tiu:tiucen:5f5a4231-5663-4a13-92a7-51aaf5dd2805
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    References listed on IDEAS

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    1. Heckman, James & Singer, Burton, 1984. "A Method for Minimizing the Impact of Distributional Assumptions in Econometric Models for Duration Data," Econometrica, Econometric Society, vol. 52(2), pages 271-320, March.
    2. Francisco L. Rivera-Batiz, 2018. "English Language Proficiency and the Economic Progress of Immigrants," World Scientific Book Chapters, in: Francisco L Rivera-Batiz (ed.), International and Interregional Migration Theory and Evidence, chapter 11, pages 165-173, World Scientific Publishing Co. Pte. Ltd..
    3. Gilles Grenier, 1984. "The Effects of Language Characteristics on the Wages of Hispanic-American Males," Journal of Human Resources, University of Wisconsin Press, vol. 19(1), pages 35-52.
    4. Douglas, Stratford M & Conway, Karen Smith & Ferrier, Gary D, 1995. "A Switching Frontier Model for Imperfect Sample Separation Information: With an Application to Constrained Labor Supply," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 36(2), pages 503-529, May.
    5. Dustmann, Christian, 1994. "Speaking Fluency, Writing Fluency and Earnings of Migrants," Journal of Population Economics, Springer;European Society for Population Economics, vol. 7(2), pages 133-156.
    6. Butler, J S & Moffitt, Robert, 1982. "A Computationally Efficient Quadrature Procedure for the One-Factor Multinomial Probit Model," Econometrica, Econometric Society, vol. 50(3), pages 761-764, May.
    7. Kossoudji, Sherrie A, 1988. "English Language Ability and the Labor Market Opportunities of Hispanic and East Asian Immigrant Men," Journal of Labor Economics, University of Chicago Press, vol. 6(2), pages 205-228, April.
    8. Geoffrey Carliner, 1981. "Wage Differences by Language Group and the Market for Language Skills in Canada," Journal of Human Resources, University of Wisconsin Press, vol. 16(3), pages 384-399.
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    More about this item

    Keywords

    panel data; wages; foreign workers;
    All these keywords.

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers

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