No Entiendo: The Effects of Bilingualism on Hispanic Earnings

Abstract

This paper examines the economic consequences of Spanish/English bilingualism in the United States. Specifically, we explore whether the ability to effectively communicate in English and Spanish is rewarded in labor markets. Using a sample of the Hispanic population in the United States drawn from census data for the year 2000 we find that bilingualism is indeed associated with higher income. The effect is, however, substantively small: on average the income level of bilingual Hispanics is 2.7 percentage points more than the income of those that Hispanics that only speak English after accounting for educational attainment, gender, age, origin, sector and region of employment and occupation. We also find that bilingualism is not rewarded in all segments of the labor market. While the correlation between bilingualism and income is positive among non-supervisory laborers in manufacturing, the association turns negative among those in managerial positions. Moreover, for those employed in the public sector where we would assume that the ability to speak both Spanish and English would be particularly valued, we find a negative correlation between bilingualism and income for all occupation categories. These findings are troubling for several reasons. They suggest that the difference in earnings may be the consequence of discrimination in labor markets. Alternatively, it is plausible that lower wages may reflect the extent to which Spanish-speaking Latinos including those who are fluent in English, receive educational services of lower quality than Hispanics that speak English only, and even non-Hispanic whites despite similar education attainment levels. The results from our tests allow us to evaluate the major contemporary academic debates on minority assimilation and incorporation. Specifically, we contend that they support the theory of segmented assimilation (Zie & Greenman 2005; Portes & Zhou 1993; among others). However, our conclusion is more negative regarding the opportunities available to Hispanic immigrants. Our findings that even when fully bilingual Hispanics’ earnings are systematically lower in different segments of the labor market suggest that only few Latinos will be capable of experiencing a conventional path to assimilation. The findings could also be construed as revealing the existence of a deeply institutionalized pattern of discrimination. 1 The authors are listed in alphabetical order to indicate that each contributed equally to the development of the paper.