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Complementarities of Occupations and Language Skills of Immigrants in Europe

Author

Listed:
  • Peter Toth

    (National Bank of Slovakia)

  • Matej Vitalos

    (Supreme Audit Office of the Slovak Republic)

Abstract

We study the returns to language skills of immigrants using the European Adult Education Survey (2016). We estimate a standard income equation augmented by self-reported proficiency levels in the host country's language and in English. Contrary to earlier literature, we find that the inclusion of English skills of immigrants increases the estimated returns to proficiency in the local language. Next, considering heterogeneous effects across occupations, we find significantly positive returns to language proficiency only for medium-skilled occupations. Among those, blue-collar jobs reward fluency in both the local language and English. Whereas in white-collar jobs, only the knowledge of English yields significantly higher income. These estimates are consistent with occupational sorting of immigrants and suggest that there are complementarities between proficiency in languages and job skills for some occupations. Following earlier literature, we also corrected the potential endogeneity bias in host-country language skills using instrumental variable methods. Our findings could be relevant for immigration policies in Europe.

Suggested Citation

  • Peter Toth & Matej Vitalos, 2024. "Complementarities of Occupations and Language Skills of Immigrants in Europe," Working and Discussion Papers WP 10/2024, Research Department, National Bank of Slovakia.
    • Handle: RePEc:svk:wpaper:1114
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    References listed on IDEAS

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    More about this item

    JEL classification:

    • J15 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Minorities, Races, Indigenous Peoples, and Immigrants; Non-labor Discrimination
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers

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