Thomsen, Stephan L. Gernandt, Johannes Aldashev, Alisher
Year of Publication:
ZEW Discussion Papers 08-090
Language proficiency may not only affect the earnings of the individual, but the probability to participate in the labor market or becoming employed as well. It may also affect selection of people into economic sector and occupation. In this paper, the effects of language proficiency on earnings are analyzed for foreigners in Germany with joint consideration of up to four types of selection. The results show that language proficiency significantly increases participation and employment probability and affects occupational choice. When selection into economic sector and occupation is regarded, we do not find an impact of language ability on earnings thereby implying an indirect effect.
Foreigners Participation Employment Language Ability Multiple Selection