Returns to Foreign Languagues of Native Workers in the EU

CORE Discussion Paper No. 2007/21

25 Pages Posted: 16 Aug 2007

See all articles by Victor A. Ginsburgh

Victor A. Ginsburgh

Catholic University of Louvain (UCL) - Center for Operations Research and Econometrics (CORE); Université Libre de Bruxelles (ULB) - European Center for Advanced Research in Economics and Statistics (ECARES)

Juan Prieto-Rodriguez

Universidad de Oviedo

Date Written: December 2006

Abstract

Most papers on returns to languages are concerned with immigrants. We use the European Community Household Panel Survey (ECHP) to infer returns on non-native languages by non-immigrants in nine countries of the European Union. We differ from the few other studies that deal with the same problem in three respects. First, we correct for time-dependent measurement errors in self-reporting as suggested by Dustmann and Van Soest and find that the resulting IV estimates are much larger than those obtained by OLS. We also suggest that there is little room for time-persistent errors and heterogeneity, and that therefore our estimates should not suffer from the other usual biases. Secondly, instead of using a dummy for each language, we use the ratio of the population that is not proficient in a language in each country considered. Finally, we estimate instrumental variable quantile regressions to illustrate how returns to languages vary at different points of the distribution of earnings.

Suggested Citation

Ginsburgh, Victor A. and Prieto Rodríguez, Juan, Returns to Foreign Languagues of Native Workers in the EU (December 2006). CORE Discussion Paper No. 2007/21, Available at SSRN: https://ssrn.com/abstract=1006756 or http://dx.doi.org/10.2139/ssrn.1006756

Victor A. Ginsburgh (Contact Author)

Catholic University of Louvain (UCL) - Center for Operations Research and Econometrics (CORE) ( email )

34 Voie du Roman Pays
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Université Libre de Bruxelles (ULB) - European Center for Advanced Research in Economics and Statistics (ECARES) ( email )

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Brussels, B-1050
Belgium
+32 2 650 3839/4 (Phone)
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Juan Prieto Rodríguez

Universidad de Oviedo ( email )

Facultad de Economia y Empresa
Departamento de Economia. Avenida del Cristo
Oviedo, Asturias 33006
Spain
+ (34) 985103768 (Phone)
+ (34) 985104871 (Fax)

HOME PAGE: http://www.unioviedo.es/juanprieto/index_e.html

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