

Does knowing foreign language pay off in the Russian labor market?
https://doi.org/10.32609/0042-8736-2019-6-122-141
Abstract
Though foreign language is widely accepted as an important form of human capital and a factor of economic growth, the labor market outcomes for foreign language skills in developing economies remain understudied. This research explores the returns to different levels of foreign language skills in the Russian labor market and tries do disentangle the differences in return associated with job characteristics. The results indicate positive wage premium for foreign language skills in Russia which approximately equals to 9% when controlling for job-related characteristics. Moreover, wage premium for advanced level of knowledge reaches 24%. However, there is considerable heterogeneity in the economic returns across age groups, levels of education, and occupations. The highest return to foreign language skills is obtained by managers and results to be 13%. For elementary occupations the estimate appears to be insignificant which proves that return to foreign language skills exists only for a limited number of specific jobs.
About the Authors
Ksenia V. RozhkovaRussian Federation
Moscow
Sergey Yu. Roshchin
Russian Federation
Moscow
References
1. Kapeliushnikov R. I., Lukyianova A. L. (2010). Transformation of human capital in Russian society (based on “Russian longitudinal monitoring survey”). Moscow: Liberal Mission Foundation. (In Russian).
2. Adamchik V., Hyclak T., Sedlak P. (2017). Poland in an integrated European economy: Are foreign language skills valued by employers in the Polish labor market? Paper presented to the Association for Comparative Economic Studies, Chicago, IL, January 8, 2017.
3. Adescope O., Lavin T., Thompson T., Ungerleider C. (2010). A systematic review and meta-analysis of the cognitive correlates of bilingualism. Review of Educational Research, Vol. 80, No. 2, pp. 207—245.
4. Albouy D. (20 08). The wage gap between Francophones and Anglophones: A Canadian perspective, 1970—2000. Canadian Journal of Economics, Vol. 41, No. 4, pp. 1211—1238.
5. Angrist J. D., Lavy V. (1997). The effect of a change in language of instruction on the returns to schooling in Morocco. Journal of Labor Economics, Vol. 15, No. 1, S48—S76.
6. Arrow K. J. (1973). Higher education as a filter. Journal of Public Economics, Vol. 2, No. 3, pp. 193—216.
7. Azam M., Chin A., Prakash N. (2013). The returns to English language skills in India. Economic Development and Cultural Change, Vol. 61, No. 2, pp. 335—367.
8. Bleakley H., Chin A. (2004). Language skills and earnings: evidence from childhood immigrants. Review of Economics and Statistics, Vol. 86, No. 2, pp. 481—496.
9. Casale D., Posel D. (2011). English language proficiency and earnings in a developing country : The case of South Africa. Journal of Socio-Economics, Vol. 40, pp. 385—393.
10. Chakraborty T., Bakshi S.K. (2016). English language premium: Evidence from a policy experiment in India. Economics of Education Review, Vol. 50, pp. 1—16.
11. Chiswick B., Miller P. (2002). Immigrant earnings: Language skills, linguistic concentrations and the business cycle. Journal of Population Economics, Vol. 15, No. 1, pp. 31—57.
12. Chiswick B., Miller P. (2010). Occupational language requirements and the value of English in the US labor market. Journal of Population Economics, Vol. 23, No. 1, pp. 353—372.
13. Damari R., Rivers W.P., Brecht R., Gardner P., Pulupa C., Robi nson J. (2017). The demand for multilingual human capital in the U.S. labor market. Foreign Language Annals, Vol. 50, No. 1, pp. 13-37.
14. Di Paolo A., Raymond J. L. (2012). Language knowledge and earnings in Catalonia. Journal of Applied Economics, Vol. 15, pp. 89—118.
15. Donado A. (2017). Foreign languages and their impact on unemployment. Labour, Vol. 31, No. 3, pp. 265—287.
16. Duncan A., Mavisakalyan A. (2015). Russian language skills and employment in the Former Soviet Union. Economics of Transition, Vol. 23, No. 3, pp. 625—656.
17. Dustmann C. (1994). Speaking fluency, writing fluency and earnings of migrants. Journal of Population Economics, Vol. 7, No. 2, pp. 133—156.
18. Dustmann C., Fabbri F. (2003). Language proficiency and labour market performance of immigrants in the UK. Economic Journal, Vol. 113, No. 489, pp. 695—717.
19. Fabo B., Beblavy M., Lenaerts K. (2017). The importance of foreign language skills in the labor markets of Central and Eastern Europe: An assessment based on data from online job portals. Empirica, Vol. 44 , No. 3, pp. 487—508.
20. Fidermuc J. (2011). The economics of multilinguism in the EU. CEDI Discussion Paper Series, No. 11-04. Centre for Economic Development and Institutions(CEDI), Brunel University.
21. Fry R., Lowell L. (2003). The value of bilingualism in the U.S. labor market. Industrial and Labor Relations Review, Vol. 57, No. 1, pp. 128—140.
22. Ginsburgh V., Prieto-Rodriguez J. (2011). Returns to foreign languages of native workers in the European Union. Industrial and Labor Relations Review, Vol. 64, No. 3, pp. 599—617.
23. Grin F., Sfreddo C. (1998). Language-based earnings differentials on the Swiss labour market: Is Italian a liability? International Journal of Manpower, Vol. 19, No. 7, pp. 520—532.
24. Grin F. (2001). English as economic value: facts and fallacies. World Englishes, Vol. 20, No. 1, pp. 65—78.
25. Guo Q., Sun W. (2014). Economic returns to English proficiency for college graduates in mainland China. China Economic Review, Vol. 30, pp. 290—300.
26. Helleseter M. D. (2013). English skills and wages in a non-English speaking country: Findings from online advertisements in Mexico. Unpublished manuscript, University of California.
27. Isphording I. (2013). Returns to Foreign Language Skills of Immigrants in Spain. Labour, Vol. 27, No. 4, pp. 443—461.
28. Klein C. (2007). The valuation of plurilingual competences in an open European labour market. International Journal of Multilingualism, Vol. 4, No. 4, pp. 262-281.
29. Lang K., Siniver E. (2009). The return to English in a non-English speaking country: Russian immigrants and native Israelis in Israel. B.E. Journal of Economic Analysis and Policy, Vol. 9, No. 1, pp. 1935—1682.
30. Lehtonen T., Karjalainen S. (2009). Workplace language needs and university language education — do they meet? European Journal of Education, Vol. 44, No. 3, pp. 411-420.
31. Lochmann A., Rapoport H., Speciale B. (2018). The effect of language training on immigrants’ economic integration: Empirical evidence from France. IZA Discussion Paper, No. 11331.
32. Melitz J. (2008). Language and foreign trade. European Economic Review, Vol. 52, pp. 667—699.
33. Munshi K., Rosenzweig M. (2006). Traditional institutions meet the modern world: Caste, gender and schooling choice in a globalizing economy. American Economic Review, Vol. 96, No. 4, pp. 1225—1252.
34. Rodriguez-Gutierrez C., Canal-Dominguez J.F. (2016). Foreign language skills and willingness to move: The case of a Spanish region. International Migration, Vol. 54, No. 3, pp. 48—60.
35. Saiz A., Zoido E. (2005). Listening to what the world says: Bilingualism and earnings in the United States. Review of Economics and Statistics, Vol. 87, pp. 523—538.
36. Sakellariou C. (2009). Endogenity, computers, language skills and wages among university graduates in Vietnam. Applied Economics, Vol. 41, No. 5, pp. 653—663.
37. Stöhr T. (2015). The returns to occupational foreign language use: Evidence from Germany. Labour Economics, Vol. 32, pp. 86—98.
38. Toomet O. (2011). Learn English, not the local language! Ethnic Russians in the Baltic states. American Economics Review, Vol. 101, No. 3, pp. 526-531.
39. Vaillancourt F. (1996). Language and socioeconomic status in Quebec: Measurement, findings, determinants, and policy costs. International Journal of Sociology of Language, Vol. 121, pp. 69-92.
40. Williams D. R. (2011). Multiple language usage and earnings in Western Europe. International Journal of Manpower, Vol. 32, No. 4, pp. 372—393.
Review
For citations:
Rozhkova K.V., Roshchin S.Yu. Does knowing foreign language pay off in the Russian labor market? Voprosy Ekonomiki. 2019;(6):122-141. (In Russ.) https://doi.org/10.32609/0042-8736-2019-6-122-141