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Language and Labor Market Success

Author

Listed:
  • Isphording, Ingo E.

    (IZA)

Abstract
This article summarizes three different strands of the literature that address the labor market effects of language-related human capital. (1) A general importance is demonstrated in the empirical evidence on earnings and employment effects of literacy as the ability to productively use written information. Significant effects are found for developed and developing countries, leading on an aggregated macro level to a positive relationship between literacy and economic development. (2) The ongoing globalization leads to an increased demand for foreign language proficiency to reduce search and information costs and overcome cultural barriers in the trade of services and goods and tourism. Against the background of scarce skill supply, employers are willing to pay significant wage premia, especially for global and local lingua franca. (3) For international migrants, destination language skills display both a prerequisite for and outcome of successful integration. Investments into destination language skills are highly rewarded by wage returns and higher employment probabilities and act as the medium of translation to apply pre-migration human capital in the destination country labor market.

Suggested Citation

  • Isphording, Ingo E., 2014. "Language and Labor Market Success," IZA Discussion Papers 8572, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp8572
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    References listed on IDEAS

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    2. Bia, Michela & Flores-Lagunes, Alfonso & Mercatanti, Andrea, 2018. "Evaluation of Language Training Programs in Luxembourg using Principal Stratification," GLO Discussion Paper Series 289, Global Labor Organization (GLO).
    3. Fabo, B., 2017. "Towards an understanding of job matching using web data," Other publications TiSEM b8b877f2-ae6a-495f-b6cc-9, Tilburg University, School of Economics and Management.
    4. Makó, Ágnes, 2019. "A közismereti tudás és az elkötelezettség hatása a szakiskolát végzettek munkaerőpiaci esélyeire [General knowledge and commitment as factors in the labour-market chances of those completing vocati," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(4), pages 434-458.
    5. Pieroni, Luca & d'Agostino, Giorgio & Lanari, Donatella, 2019. "The effects of language skills on immigrant employment and wages in Italy," MPRA Paper 91725, University Library of Munich, Germany.
    6. Yameogo, Souleymane, 2020. "Adopting Local Languages as Official Languages: Effect on Women and Rural Individuals' Labor Force in Burkina Faso," KDI Journal of Economic Policy, Korea Development Institute (KDI), vol. 42(2), pages 31-56.

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    More about this item

    Keywords

    integration; immigration; foreign languages; wage formation; productivity; returns; human capital; literacy; language; assimilation; linguistic barriers; linguistic distance;
    All these keywords.

    JEL classification:

    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • 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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