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Returns to Foreign Language Skills in a Developing Country: The Case of Turkey

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  • Antonio Di Paolo

    (AQR-IREA, Universitat de Barcelona)

  • Aysit Tansel

    (Middle East Technical University, IZA & ERF)

Abstract

Foreign language skills represent a form of human capital that can be rewarded in the labor market. Drawing on data from the Adult Education Survey of 2007, this is the first study estimating returns to foreign language skills in Turkey. We contribute to the literature on the economic value of language knowledge, with a special focus on a country characterized by fast economic and social development. Although English is the most widely spoken foreign language in Turkey, we initially consider the economic value of different foreign languages among the employed males aged 25 to 65. We find positive and significant returns to proficiency in English and Russian, which increase with the level of competence. Knowledge of French and German also appears to be positively rewarded in the Turkish labor market, although their economic value seems mostly linked to an increased likelihood to hold specific occupations rather than increased earnings within occupations. Focusing on English, we also explore the heterogeneity in returns to different levels of proficiency by frequency of English use at work, birth-cohort, education, occupation and rural/urban location. The results are also robust to the endogenous specification of English language skills.

Suggested Citation

  • Antonio Di Paolo & Aysit Tansel, 2013. "Returns to Foreign Language Skills in a Developing Country: The Case of Turkey," Working Papers XREAP2013-07, Xarxa de Referència en Economia Aplicada (XREAP), revised Oct 2013.
  • Handle: RePEc:xrp:wpaper:xreap2013-07
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    More about this item

    Keywords

    Foreign Languages; Returns to Skills; Heterogeneity; Turkey;
    All these keywords.

    JEL classification:

    • I25 - Health, Education, and Welfare - - Education - - - Education and Economic Development
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East

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