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Language knowledge and earnings in Catalonia

  • Antonio Di Paolo


    (Departament d'Economia Aplicada, Universitat Autònoma de Barcelona (UAB); Campus de Bellaterra, Edifici B 08193 Bellaterra (Cerdanyola), Spain. Institut d’Economia de Barcelona, Universitat de Barcelona.)

  • Josep Lluís Raymond


    (Departament de Fonaments de l’Anàlisi Econòmic, Universitat Autònoma de Barcelona (Spain). Institut d’Economia de Barcelona, Universitat de Barcelona.)

This paper investigates the economic value of Catalan knowledge for national and foreign first- and second-generation immigrants in Catalonia. Specifically, drawing on data from the “Survey on Living Conditions and Habits of the Catalan Population (2006)”, we want to quantify the expected earnings differential between individuals who are proficient in Catalan and those who are not, taking into account the potential endogeneity between knowledge of Catalan and earnings. The results indicate the existence of a positive return to knowledge of Catalan, with a 7.5% increase in earnings estimated by OLS; however, when we account for the presence of endogeneity, monthly earnings are around 18% higher for individuals who are able to speak and write Catalan. However, we also find that language and education are complementary inputs for generating earnings in Catalonia, given that knowledge of Catalan increases monthly earnings only for more educated individuals.

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Paper provided by Xarxa de Referència en Economia Aplicada (XREAP) in its series Working Papers with number XREAP2010-07.

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Length: 40 pages
Date of creation: Jul 2010
Date of revision: Jul 2010
Handle: RePEc:xrp:wpaper:xreap2010-07
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