Session Information
31 SES 09, Language Knowledge, Development and Policies in European Countries
Paper Session
Contribution
Available information suggests that European citizens believe that knowing foreign languages increases their chances of finding a better job in their own country and abroad (European Commission, 2012). Foreign language proficiency is viewed in the economics literature as a form of human capital. For Chiswick (2008), “Language skills are an important form of human capital. They satisfy the three basic requirements for human capital: they are embodied in the person; they are productive in the labour market and or in consumption; and they are created at a sacrifice of time and out-of-pocket resources (p. 314).” According to Grenier (1984), people invest in learning languages because they expect to get a return of their investment in terms of future earnings. Most of the evidence that foreign language knowledge brings advantages to individuals comes from studies conducted in the US that consider the wage premium associated with speaking a foreign language. Earning outcomes have been used in estimates of language proficiency for immigrants and native-born bilinguals, as well as for the general population. For example, in the US context the estimated foreign-language return implies a 2.8% wage premium for the average individual (Saiz and Zoido, 2005).
In Europe, “Saiz and Zoido (2002) show evidence of a positive association between using a second language at work and higher earnings in the European Union. This association is present in such English-speaking countries as Ireland and the United Kingdom (Saiz and Zoido, 2005, p.525).” Williams (2011) reports significant earnings premiums for English usage at work in twelve European countries, as well as for the use of other languages, especially French and German, in some cases. Ginsburgh and Prieto-Rodriguez (2011) also studied this relationship in several European countries and confirmed the existence of a substantial return to English proficiency. The economic return to English proficiency has also been analysed in some developing countries, such as Latvia and Estonia, where Toomet (2011) found that skills in local languages are not remunerated in these countries while English proficiency produces a significant earnings premium. A recent study in Turkey found a positive and significant monthly wage return to proficiency in English and Russian that increases with the proficiency level (Di Paolo & Tansek, 2013). However, there is little research on how foreign language knowledge may increase labour market opportunities in Europe. That is, existing research indicates that there is a wage premium associated with foreign language knowledge but not much is known about whether it affects chances of employment. The Adult Education Survey (AES 2011) allows for the investigation of the presence of this effect. Any advantage or lack thereof associated with language knowledge in the labour market can be investigated in AES by employment status (employed vs. unemployed). More specifically, although the AES inquires on the net monthly income of the household, it does not collect information on earnings at the individual level. However, the breath of information collected on individual characteristics in conjunction with information on foreign language knowledge and the labour status of individuals allows for the control of confounding factors such as the education level completed, age, gender and parental education. Given the high unemployment rate registered in many European countries and current policy efforts to boost language competences (European Commission, 2012) the investigation of whether language knowledge is related to employability is warranted and can provide policy-based evidence. Thus, the research questions addressed in this study are: What is the relationship between language knowledge and employment status? Does knowing a foreign language affect the employed and the unemployed in the same way and is perceived level of proficiency associated with employment status?
Method
Expected Outcomes
References
Chiswick, B. R. (2008). The Economics of Language: An Introduction and Overview. IZA DP No. 3568. Di Paolo, A. & Tansel, A. (2013). Returns to Foreign Language Skills in a Developing Country: The Case of Turkey. IZA DP No. 7724. European Commission (2012). Language competences for employability, mobility and growth. Commission Staff Working Document. SWD (2012) 372 final. See http://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:52012SC0372&rid=1 Ginsburgh, V. A. & Prieto-Rodriguez, J.(2011). Returns to foreign languages of native workers in the EU, Industrial and Labor Relations Review. 64(3), 599-617. Grenier, G. (1984). The effects of language acquisition on the wage of Hispanic-American males. Journal of Human Resources, 19, 1, 35-52. Saiz, A. & Zoido, E. (2002). The returns to speaking a second language. Working Papers 02-16, Federal Reserve Bank of Philadelphia. Saiz, A. & Zoido, E., 2005. Listening to what the world Says: Bilingualism and earnings in the United States. The Review of Economics and Statistics. 87(3), 523-538. Williams, D. (2011). The economic returns to multiple language usage in Western Europe. International Journal of Manpower. 32(4), 372-393. Toomet, O. (2011). Learn English, Not the local language! Ethnic Russians in the Baltic States. American Economic Review: Papers and Proceedings. 101(3), 526-531.
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