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Heterogeneity in marginal returns to language training of immigrants

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  • Giesecke, Matthias
  • Schuss, Eric

Abstract

We estimate the effect of language training on subsequent employment and wages of immigrants under essential heterogeneity. The identifying variation is based on regional differences in language training availability that we use to instrument endogenous participation. Estimating marginal treatment effects along the distribution of observables and unobservables that drive individual participation decisions, we find that immigrants with higher gains are more likely to select into language training than immigrants with lower gains. We document up to 15% higher employment rates and 13% wage gains for immigrants with a high desire to participate but the positive returns vanish with increasing resistance to treatment. This pattern of selection on gains correlates with unobserved ability and motivation, promoting investments in education and job-specific skills that yield higher returns when complemented by language capital in the host country.

Suggested Citation

  • Giesecke, Matthias & Schuss, Eric, 2019. "Heterogeneity in marginal returns to language training of immigrants," Ruhr Economic Papers 812, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    • Handle: RePEc:zbw:rwirep:812
    DOI: 10.4419/86788941
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    Cited by:

    1. Antonio Di Paolo & Bernat Mallén, 2022. ""Does geographical exposure to language learning centres matter in a bilingual city?"," IREA Working Papers 202205, University of Barcelona, Research Institute of Applied Economics, revised May 2022.
    2. Anthony Edo & Lionel Ragot & Hillel Rapoport & Sulin Sardoschau & Andreas Steinmayr & Arthur Sweetman, 2020. "An introduction to the economics of immigration in OECD countries," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 53(4), pages 1365-1403, November.
    3. Elisa Gerten & Michael Beckmann & Elisa Gerten & Matthias Kräkel, 2022. "Information and Communication Technology, Hierarchy, and Job Design," ECONtribute Discussion Papers Series 189, University of Bonn and University of Cologne, Germany.
    4. Fabian Koenings, 2021. "Can there be too much information? Heterogeneous responses to information on benefits from language proficiency," Jena Economics Research Papers 2021-016, Friedrich-Schiller-University Jena.
    5. Di Paolo, Antonio & Mallén, Bernat, 2023. "Does geographical exposure to language learning centres affect language skills and labour market outcomes in a bilingual city?," Economic Analysis and Policy, Elsevier, vol. 80(C), pages 429-449.

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    More about this item

    Keywords

    language training; heterogeneous returns; marginal treatment effects; continuous instrument;
    All these keywords.

    JEL classification:

    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
    • J68 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Public Policy
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration

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