The impact of host language proficiency across the immigrants\u2019 earning distribution in Spain

Santiago Budría,Carlos Martinez De Ibarreta,Pablo Swedberg

doi:10.1186/s40176-017-0094-2

Santiago Budría, Carlos Martinez De Ibarreta + Show 1 more

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https://doi.org/10.1186/s40176-017-0094-2

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Abstract

This paper explores the impact of Spanish language proficiency on immigrant earnings in Spain using an instrumental variable quantile regression approach. The impact is on average roughly 17.2% but varies substantially across the earning distribution. The return to destination language proficiency actually ranges from zero at the bottom quantiles to 30% at the top quantile of the earning distribution. These findings suggest that the benefits derived from host language knowledge are particularly important among individuals with stronger unobserved abilities and marketable skills and that language training policies targeted at specific immigrant population categories may be ineffective from a labor market earning perspective.JEL Classification: F22, J24, J61

Highlights

There is a significant literature examining how immigrant’s host language proficiency affects earnings
In Spain, most research conducted has focused on Catalonia, and its regional language, Catalan (Rendón 2007; Di Paolo 2011; Di Paolo and Raymond 2012), while efforts to assess the impact of Castilian Spanish language proficiency on immigrant earnings at a country level are much relatively recent (Budría and Swedberg 2014)
Our results show that the difference between the return for workers at the top and bottom of the earning distribution is as high as 42.3% for the full sample and 54.7% for workers that have completed at least upper secondary education

Summary

Introduction

There is a significant literature examining how immigrant’s host language proficiency affects earnings. In Spain, most research conducted has focused on Catalonia, and its regional language, Catalan (Rendón 2007; Di Paolo 2011; Di Paolo and Raymond 2012), while efforts to assess the impact of Castilian Spanish language proficiency on immigrant earnings at a country level are much relatively recent (Budría and Swedberg 2014). Language may play a crucial role in return migration since five of the ten largest immigrant populations that arrived in Spain are from Spanish-speaking countries. Since Spain is the only Spanish-speaking country in the EU and Spaniards typically exhibit very poor foreign language skills as shown by the Eurobarometer 2012, many young Spaniards compete for jobs with immigrants. According to new figures released by Eurostat in 2015, unemployment among foreigners in Spain is 29.8%, vastly exceeding the unemployment rate for nationals

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