English Language Proficiency and the Earnings of Young Immigrants in U.S. Labor Markets

Abstract

This paper studies the English language proficiency levels of immigrants to the United States as determined from scores on a standardized test explicitly designed to measure reading proficiency. The data are disaggregated by area of origin and year of immigration. The connection between English deficiency levels and wages is then examined. In contrast to previous studies, it is found that English deficiency unambiguously depresses the wages of immigrants below what their other human capital characteristics suggest they should earn in the U.S. labor market. At the same time, the data show that, among the sample of young adults examined, there is a remarkable correlation between learning of English and time lived in the United States. The study indicates that policies encouraging the acquisition of English as a second language may provide a high dividend in the form of economic progress among immigrants.