The Labor Market Effects of English Language Proficiency: Communication Skills and the Occupational Choice of Childhood Immigrants to the United States

Abstract

I examine the effect of English language proficiency on the occupational choices of childhood immigrants into the United States. In particular, I focus on the annual earnings and skills composition associated with immigrants' chosen occupations. Following Bleakley and Chin (2004; 2010), I use an instrumental variables approach that exploits young children's superior language acquisition abilities to estimate the causal effect of English language skills on immigrants' choice of occupation. In addition, I employ another instrument, based on Chiswick and Miller (2004), that accounts for the variation in English language acquisition difficulty among native speakers of other languages. I find that higher proficiency allows immigrants to work in more lucrative occupations. In addition, a better grasp of the English language leads immigrants to choose occupations in which communication skills -- active listening, negotiation, persuasion, reading comprehension, speaking, and writing -- are more important. These findings suggest that occupational choice is an important additional channel through which immigrants with a good command of the English language achieve better labor market outcomes.