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Title: Language and the Earnings of Immigrants

Author(s): Christian Dustmann and Arthur van Soest

Publication Date: November 1998

Keyword(s): endogeneity, International Migration and language

Programme Area(s): Labour Economics

Abstract: A number of studies have established a positive effect of migrants' language proficiency on their productivity. It has been argued that these estimates are upward-biased because of the presence of unobserved heterogeneity. To obtain an accurate estimate of language effects is important since it has potentially important implications for migration policies. Using panel data on immigrants in Germany, we show that in self-reported measures of language proficiency measurement error is substantial. Our results suggest that measurement error is a more serious problem than unobserved heterogeneity, and that Least Squares underestimates the effect of speaking fluency on earnings.

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Bibliographic Reference

Dustmann, C and van Soest, A. 1998. 'Language and the Earnings of Immigrants'. London, Centre for Economic Policy Research. https://cepr.org/active/publications/discussion_papers/dp.php?dpno=2012