Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/85069 
Authors: 
Year of Publication: 
2013
Series/Report no.: 
Kiel Working Paper No. 1880
Publisher: 
Kiel Institute for the World Economy (IfW), Kiel
Abstract: 
This paper analyses the wage premia associated with workers' occupational use of foreign languages in Germany. After eliminating time-invariant unobserved heterogeneity and other confounding factors, sizable returns of about 10 percent to applying fluent English skills are found. Returns to occupational use of other foreign languages are, if anything, restricted to a few specialized occupations. Compared to non-migrants, immigrants receive more than twice the return for using English. Returns depend crucially on speaking German well, thus excluding many first generation migrants and are found to occur particularly in service occupations that involve international factor flows. In such occupations it is likely that migrants can apply complementary skills such as international experience that their non-migrant counterparts lack. As immigrants do not earn significant wage premia for applying their native language on the job in addition to those for English, their trade-fostering potential seems to be unlocked by complementary fluency in the two business languages German and English.
Subjects: 
foreign language skills
migration
wage structure
human capital
occupational choice
JEL: 
J24
F22
J30
Document Type: 
Working Paper

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