Labor markets in advanced economies have undergone substantial change in recent decades due to globalization, technological improvements, and organizational changes. Due to these developments, oral and written language skills have become increasingly important even in less skilled jobs. Immigrants - who often have limited skills in the host country language upon arrival - are likely to be particularly affected by the increase in language requirements. Despite this increase in literacy requirements, little is known about how immigrants' language proficiency is rewarded in the labor market. However, estimating the causal effect of immigrants' language skills on hiring is challenging due to potential biases caused by omitted variables, reverse causality, and measurement error. To address identification problems, we conduct a large-scale field experiment, where we send thousands of fictitious resumes to employers with a job opening. With the help of a professional linguist, we manipulate the cover letters by introducing common second-language features, which makes the resumes reflect variation in the language skills of real-world migrants. Our findings show that better language proficiency in the cover letter has a strong positive effect on the callback rate for a job interview: moving from the lowest level of language proficiency to a level similar to natives almost doubles the callback rate. Consistent with the recent development that language proficiency is also important for many low- and medium-skilled jobs, the effect of better language skills does not vary across the vastly different types of occupations we study. Finally, the results from employer surveys suggest that it is improved language skills per se that is the dominant explanation behind the language proficiency effect, rather than language skills acting as a proxy for other unobserved abilities or characteristics.

This paper asks to what extent host language proficiency can insure immigrants against the risk of ending up in mismatched jobs. Using the 2003-2016 waves of the Household, Income and Labour Dynamics in Australia (HILDA), the paper discriminates between three forms of mismatch, overqualification, under-qualification and over-skilling. Host language proficiency is instrumented using Bleakley and Chin (Rev Econ Stat 86:481-496, 2004) strategy, which exploits the fact that younger children learn languages more easily than older ones. To differentiate between local average treatment effects (LATE) and average treatment effects (ATE), the paper considers two alternative models, 2SLS instrumental variables and biprobit. We find that treatment effects are heterogeneous. English language proficiency among immigrants in Australia reduces the probability of ending up in over-qualified jobs, by between 17.2 (LATE) and 36.7 (ATE) percentage points. The ATE of overs-skilling is also significant and about -8.9 percentage points. In contrast, language skills tend to raise the probability of being under-qualified at the job, by about 8.6 percentage points according to the ATE. Local effects of over-skilling and underqualification fail to be statistically significant, suggesting that host language proficiency may be innocuous for some workers. Overall, the results indicate that host language proficiency is a country-specific, valuable form of human capital.

"Numerous studies have demonstrated that higher proficiency in the language spoken in the destination country improves immigrant labour market outcomes. However, because of a lack of objective measures of language skills, previous studies have mainly drawn on subjective measures of language proficiency and were confined to the effect of only one dimension or general language skills. This study examines the effects of test-based measures of official language proficiency in four dimensions - listening, speaking, reading and writing - on immigrant employment and earnings. The analysis focuses on economic principal applicants admitted through the Express Entry (EE) system who immigrated to Canada from 2015 to 2018. A self-reported language measure based on self-reported knowledge of official languages at immigration and mother tongue is also examined for comparison"--Abstract, page 1.

Written by two internationally renowned experts in the field, this book explores the determinants of dominant language proficiency among immigrants and other linguistic minorities and the consequences of this proficiency for the labour market.Using empirical material from a range of countries, including the USA, Canada, Australia and Bolivia, the a

The Economic and Fiscal Consequences of Immigration finds that the long-term impact of immigration on the wages and employment of native-born workers overall is very small, and that any negative impacts are most likely to be found for prior immigrants or native-born high school dropouts. First-generation immigrants are more costly to governments than are the native-born, but the second generation are among the strongest fiscal and economic contributors in the U.S. This report concludes that immigration has an overall positive impact on long-run economic growth in the U.S. More than 40 million people living in the United States were born in other countries, and almost an equal number have at least one foreign-born parent. Together, the first generation (foreign-born) and second generation (children of the foreign-born) comprise almost one in four Americans. It comes as little surprise, then, that many U.S. residents view immigration as a major policy issue facing the nation. Not only does immigration affect the environment in which everyone lives, learns, and works, but it also interacts with nearly every policy area of concern, from jobs and the economy, education, and health care, to federal, state, and local government budgets. The changing patterns of immigration and the evolving consequences for American society, institutions, and the economy continue to fuel public policy debate that plays out at the national, state, and local levels. The Economic and Fiscal Consequences of Immigration assesses the impact of dynamic immigration processes on economic and fiscal outcomes for the United States, a major destination of world population movements. This report will be a fundamental resource for policy makers and law makers at the federal, state, and local levels but extends to the general public, nongovernmental organizations, the business community, educational institutions, and the research community.

We empirically analyze the language proficiency of migrants in the Netherlands. Traditionally, the emphasis in studying language proficiency and economic outcomes has been on the relation between earnings and indicators for language proficiency, motivated by the human capital theory. Here we analyze whether there is a relation between proficiency of the destination language and job level. A lack of language skills may induce the migrant to work in jobs of a lower level leading to lower job satisfaction. We use subjective survey information about job satisfaction and the fit between the migrant's education and skill level and the job. We also use objective information on professional level.Our estimation strategy allows for unobservable correlations between language proficiency and labour market outcomes by employing a simultaneous two equations framework which also exploits the panel nature of our data, by allowing for time persistent random effects. We use a variety of different instrumental variables, some of which are related to linguistic distance, to shed light on the robustness of the results. For men, we find evidence for a positive relationship between indicators for language proficiency and satisfaction with work type and professional level. For women, no impact of language proficiency on the level of the job can be found. Rather, women with lower proficiency levels are not selected into employment in the first place.

I examine the effect of English language profi ciency on the occupational choices of childhood immigrants into the United States. Following Bleakley and Chin (2004; 2010), I use an instrumental variables approach that exploits young children's superior language acquisition abilities to estimate the causal effect of English language skills on immigrants' choice of occupation. I find that immigrants with higher proficiency are more likely to work in jobs that require a sophisticated use of the English language, such as sales and administrative occupations. By contrast, immigrants with a weaker grasp of English are more likely to end up in occupations that do not rely on language skills, e.g. food preparation, farming, or production. I show that this effect is not driven primarily by the education channel, but is rather mostly the result of individuals' choice of the most suitable job within their educational category.