Empirica – Journal of European Economics

Sponsored by the Austrian Economic Association and the Austrian Institute of Economic Research

Empirica publishes empirical and theoretical work on all economic aspects of European Integration. The topics may range from all challenges concerning the deepening of the European Union (Single Market, Lisbon Agenda, EMU) to enlargement and the external relations of the EU (globalisation).

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Jacek Liwiński
The wage premium from foreign language skills
in: Bengt-Arne Wickström, Michele Gazzola, Torsten Templin (Hrsg.), Language skills, the labour market, and socioeconomic integration
Empirica, 2019, 46(4), S.691-711, http://www.springer.com/10663
The globalisation of labour markets makes language skills one of the key competences required by employers nowadays. The purpose of this paper is to estimate the wage premium from the foreign language skills earned by Poles. Poles seem to be a good case study, because the Polish language is not used for international communication and as many as 58 percent of Poles command at least one foreign language. I use data from three waves (2012-2014) of the Human Capital Balance survey with a pooled sample of about 35,000 individuals. I estimate a wage equation with the Heckman correction for selection to employment and I check for robustness with propensity score matching. I find that the advanced command of a foreign language yields a wage premium of 11 percent on average. Interestingly, I find a much higher wage premium from proficiency in Spanish (32 percent), French (22 percent) or Italian (15 percent) than from proficiency in English (11 percent) or German (12 percent).
JEL-Codes:I26 J24
Keywords:Foreign language skills Wage premium Wage equation
Forschungsbereich:Arbeitsmarkt, Einkommen und soziale Sicherheit

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Univ.-Prof. Mag. Dr. Fritz Breuss

Funktion: Ökonom (Senior Economist), Managing Editor Empirica