Complementarities of Occupations and Language Skills of Immigrants in Europe

Peter Tóth and Matej Vitalos ()
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Matej Vitalos: Supreme Audit Office of the Slovak Republic

No WP 10/2024, Working and Discussion Papers from Research Department, National Bank of Slovakia

Abstract: We study the returns to language skills of immigrants using the European Adult Education Survey (2016). We estimate a standard income equation augmented by self-reported proficiency levels in the host country's language and in English. Contrary to earlier literature, we find that the inclusion of English skills of immigrants increases the estimated returns to proficiency in the local language. Next, considering heterogeneous effects across occupations, we find significantly positive returns to language proficiency only for medium-skilled occupations. Among those, blue-collar jobs reward fluency in both the local language and English. Whereas in white-collar jobs, only the knowledge of English yields significantly higher income. These estimates are consistent with occupational sorting of immigrants and suggest that there are complementarities between proficiency in languages and job skills for some occupations. Following earlier literature, we also corrected the potential endogeneity bias in host-country language skills using instrumental variable methods. Our findings could be relevant for immigration policies in Europe.

JEL-codes: J15 J31 J61 (search for similar items in EconPapers)
Pages: 32 pages
Date: 2024-11
New Economics Papers: this item is included in nep-eur, nep-lma, nep-mig, nep-tra and nep-ure
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Persistent link: https://EconPapers.repec.org/RePEc:svk:wpaper:1114

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