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The wage premium from foreign language skills

Jacek Liwiński ()

Empirica, 2019, vol. 46, issue 4, No 5, 711 pages

Abstract: Abstract The globalisation of labour markets makes language skills one of the key competences required by employers nowadays. The purpose of this paper is to estimate the wage premium from the foreign language skills earned by Poles. Poles seem to be a good case study, because the Polish language is not used for international communication and as many as 58% of Poles command at least one foreign language. I use data from three waves (2012–2014) of the Human Capital Balance survey with a pooled sample of about 35,000 individuals. I estimate a wage equation with the Heckman correction for selection to employment and I check for robustness with propensity score matching. I find that the advanced command of a foreign language yields a wage premium of 11% on average. Interestingly, I find a much higher wage premium from proficiency in Spanish (32%), French (22%) or Italian (15%) than from proficiency in English (11%) or German (12%).

Keywords: Foreign language skills; Wage premium; Wage equation (search for similar items in EconPapers)
JEL-codes: I26 J24 (search for similar items in EconPapers)
Date: 2019
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DOI: 10.1007/s10663-019-09459-0

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