The Return to Knowledge of English in Non-English Speaking Country
We use a unique data set to examine the return to English knowledge. Our primary focus is on
Russian immigrants to Israel, but we study native Israelis as well. Understanding the role of English
in this setting is important for at least three reasons.
First, globalization and the ensuing growth in the importance of foreign language knowledge has
become an important theme in the popular press. The San Francisco Chronicle reports that families
seek nannies who speak a language other than English because “They want to give their children a
head start in business in 20 years.” (Helen Riley-Collins, president of Aunt Ann's In-House Staffing
in San Francisco, quoted in Hua, 2005). It is also commonly argued that the success of Canada, the
United States and other countries with large immigrant populations reflects, in part, access to world
markets fostered by the immigrant population’s knowledge of foreign languages and cultures
(Farooqui, 2005)
th Misclassified Language Indicators,” Review of Economics and Statistics, 83 (2001): 663–674. Dustmann, Christian and Arthur van Soest, “Language and the Earnings of Immigrants,” Industrial and Labor Relations Review, 55 (2002): 473–492. Farooqui, Noreen, “Immigrants Are Assets in the Global Economy,” Toronto Sun, July 6, 2005, C3. Friedberg, Rachel, “The Impact of Mass Migration on the Israeli Labor Market,” Quarterly Journal of Economics, 116 (4), 1373–1408. Fry, R.ichard and B. Lindsay Powell, ‘The Value of Bilingualism in the U.S. Labor Market,” Industrial and Labor Relations Review,” 57 (2003): 128–140. Grin, Francois, “English as Economic Value: Facts and Fallacies,” World Englishes, 20 (March 2001): 65-78. 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Tainer, E., “English Language Proficiency and the Determination of Earnings Among Foreign Men,” Journal of Human Resources, 23 (1988): 108–121. 19 TABLE 1 Basic Data for Workplace Occupation Survey and Comparison with Income Survey Income Survey WOS Survey (Russian Immigrants only) Immigrants Israelis Age 39.4(11.8) 35.7 (10.3) 33.6 (10.3) Years of education 13.7(3.1) 14.2 (2.9) 13.6 (3.1) Labor force Experience 19.8 (11.5) 15.5 (9.8) 13.9 (10.4) Years since Migration 5.4 (2.1) 5.2 (2.1) - Currently married 0.80(0.40) 0.72 (0.45) 0.62 (0.49) Male 0.61(.49) 0.56 (0.50) 0.59 (0.49) Job Tenure - 3.17(2.03) 5.91 (6.27) Current Hebrew - 2.41(0.68) * Entry Hebrew - 1.60(0.72) * Current English - 1.94(0.71) 2.47 (0.59) Entry English - 1.66(0.66) 2.16 (0.66) Monthly Earnings 3689(1700) 3861 (1900) 5280 (3283) Unskilled Worker 12% 11% 14% Skilled Worker 36% 39% 46% Physicians/Nurses - 8% 10% High-tech - 42% 30% *Assumed to speak Hebrew very well. Coded 0 for natives. - Not available. 20 TABLE 2 Basic Data for Workplace Occupation Survey by Occupation and Immigrant Status Nurses & Doctors High-Tech Skilled Unskilled Nurses & Doctors High-Tech Skilled Unskilled Immigrants Natives Age 34.4 (7.7) 38.2 (10.3) 34.6 (10.5) 31.5 (9.6) 35.7 (8.6) 32.6 (9.6) 33.4 (10.7) 34.6 (11.2) Years of education 16.5 (2.1) 15.3 (2.5) 13.1 (2.8) 12.6 (2.3) 17.8 (2.1) 14.7 (2.4) 12.6 (2.8) 11.6 (2.3) Experience 11.9 (7.4) 16.9 (9.7) 15.5 (10.1) 12.9 (9.58) 11.9 (8.1) 11.9 (8.9) 14.8 (11.0) 17.0 (11.8) Years since Migration 4.63 (1.99) 5.7 (1.9) 5.14 (2.24) 4.76 (1.81) - - - - Currently Married 0.74 (0.44) 0.74 (0.44) 0.69 (0.46) 0.70 (0.46) 0.73 (0.45) 0.57 (0.50) 0.60 (0.49) 0.69 (0.46) Male 0.41 (0.49) 0.52 (0.50) 0.60 (0.49) 0.69 (0.46) 0.43 (0.50) 0.57 (0.50) 0.62 (0.49) 0.66 (0.47) Job Tenure 3.33 (2.12) 3.16 (2.00) 3.20 (2.15) 3.04 (1.73) 9.25 (7.44) 4.94 (5.95) 5.46 (5.32) 7.10 (7.82) Current Hebrew 2.59 (0.60) 2.40 (0.67) 2.37 (0.71) 2.45 (0.62) - - - - Entry Hebrew 1.72 (0.73) 1.66 (0.70) 1.59 (0.70) 1.35 (0.57) - - - - Current English 1.86 (0.66) 2.01 (0.71) 1.91 (0.72) 1.79 (0.76) 2.79 (0.45) 2.61 (0.50) 2.38 (0.57) 2.21 (0.72) Entry English 1.50 (0.55) 1.70 (0.67) 1.65 (0.67) 1.61 (0.70) 2.44 (0.58) 2.22 (0.63) 2.13 (0.62) 1.93 (0.79) Monthly Earnings 4827 (2231) 4255 (2211) 3469 (1197) 3041 (1600) 7561 (3827) 6333 (4049) 4320 (2003) 4589 (2983) TABLE 3 CROSS -SECTION EARNINGS ESTIMATES 1 IS 2 WOS 3 WOS 4 WOS 5 WOS 6 WOS* Immigrant -0.62(0.02) -0.50 (0.03) -0.39 (0.03) -0.51 (0.04) -0.46 (0.04) -0.60 (0.06) Years since Migration/10 0.24 (0.01) 0.33 (.05) 0.26 (0.05) 0.20 (0.05) 0.20 (0.05) 0.22 (0.05) Hebrew - * * 0.06(0.02) 0.06 (0.02) 0.10 (0.02) English (very well) - * * * 0.13 (0.02) 0.14 (0.02) Male 0.51(0.01) 0.16 (0.02) 0.17 (0.02) 0.17 (0.02) 0.18 (0.02) 0.17 (0.01) Married 0.34(0.07) 0.02 (0.02) 0.01 (0.02) 0.01 (0.02) 0.01 (0.02) 0.02 (0.02) Education 0.08(.002) 0.07 (.003) 0.06 (.003) 0.06 (.003) 0.06 (.003) 0.04 (.003) Experience 0.05(.001) 0.02 (.003) 0.02 (.003) 0.02 (.003) 0.02 (.003) 0.02 (.002) Exp /1002 -0.09(.003) -0.05 (0.01) -0.05 (0.01) -0.05 (0.01) -0.05 (0.01) -0.05 (0.01) Seniority - * 0.02(.002) 0.02 (.002) 0.02 (0.002) 0.02 (0.002) Intercept 6.14 (0.05) 7.25 (0.02) 7.22 (0.04) 7.23 (0.04) 7.24 (0.04) 7.49 (0.04) R - 0.32 0.35 0.36 0.37 0.482 N 16171 2726 2726 2726 2726 2726 *Column 6 also controls for occupation and establishment fixed effects. 22 TABLE 4 CROSS -SECTION EARNINGS ESTIMATES by Education 13 or More Years Education 12 or Fewer Years Education Immigrant -0.35(0.04) -0.77 (0.06) -0.68 (0.03) -0.25 (0.04) -0.23 (0.06) -0.22 (0.06) Years since Migration/10 0.34 (0.07) 0.24 (0.07) 0.23 (0.07) 0.19 (0.08) 0.20 (0.08) 0.20 (0.08) Hebrew * 0.12(0.02) 0.11 (0.02) * -0.01 (0.02) -0.01 (0.02) English (very well) * * 0.14 (0.02) * * 0.07 (0.03) Male 0.19(0.02) 0.19 (0.02) 0.19 (0.02) 0.13 (0.02) 0.13 (0.02) 0.13 (0.02) Married 0.01(0.02) 0.01 (0.02) 0.01 (0.02) -.01 (0.03) -.005 (0.03) -0.01 (0.03) Education 0.06(.005) 0.06 (.005) 0.06 (.005) 0.04 (0.01) 0.04 (0.01) 0.03 (0.01) Experience 0.03(.004) 0.03 (.004) 0.03 (.004) 0.01 (.003) 0.01 (.003) 0.01 (.003) Exp /1002 -0.08(0.01) -0.08 (0.01) -0.07 (0.01) -0.03 (0.01) -0.03 (0.01) -0.03 (0.01) Seniority 0.02(.003) 0.02 (.003) 0.02 (.003) 0.03 (.003) 0.03 (.003) 0.03 (.003) Intercept 7.20 (0.08) 7.21 (0.08) 7.19 (0.08) 7.51 (0.09) 7.51 (0.09) 7.52 (0.09) R 0.36 0.37 0.39 0.23 0.23 0.242 N 1648 1648 1648 1078 1078 1078 23 TABLE 4A CROSS-SECTION ESTIMATES OF THE RETURN TO LANGUAGE KNOWLEDGE by Immigrant Status Hebrew English Very Well Immigrants All 0.06 (0.02) 0.11 (0.02) High Education 0.11 (0.02) 0.13 (0.03) Low Education .000 (0.02) 0.03 (0.04) Natives All * 0.10 (0.03) High Education * 0.11 (0.04) Low Education * 0.08 (0.03) 24 TABLE 5 CROSS -SECTION EARNINGS ESTIMATES by Occupation Nurses & Doctors High-Tech Skilled Unskilled Immigrant -0.78(0.17) -0.71 (0.08) -0.30 (0.06) -0.29 (0.12) Years since Migration/10 0.35 (0.20) 0.29 (0.09) 0.17 (0.07) 0.03 (0.16) Hebrew 0.19(0.06) 0.10 (0.03) 0.02 (0.02) 0.04 (0.05) English (very well) 0.27 (0.06) 0.18 (0.03) 0.09 (0.02) 0.05 (0.04) R 0.56 0.40 0.24 0.542 N 244 993 1141 348 Other controls: male, married, education, experience and experience squared, seniority. 25 TABLE 6 LONGITUDINAL EARNINGS ESTIMATES (1) (2) (3) (4) (5) Immigrant -0.01(0.02) -0.06 (0.02) -0.05 (0.02) -0.05 (0.02) -0.06 (0.02) Seniority/10 0.24(0.01) 0.24 (0.01) 0.22 (0.01) 0.21 (0.02) 0.21 (0.02) Seniority/10* Immigrant 0.24 (0.04) 0.20 (0.04) 0.20 (0.04) 0.16 (0.04) 0.19 (0.04) Change in Hebrew fluency * 0.07 (0.01) 0.06 (0.01) 0.06 (0.01) 0.05 (0.01) Change in knowing English very well * * 0.12 (0.02) 0.10 (0.02) 0.09 (0.02) Additional controls No No No Yes Yes Fixed occupation and establishment effects No No No No Yes R 0.13 0.14 0.15 0.18 0.292 N 2726 2726 2726 2726 2726 Dependent variable: Change in log wage Additional controls: Experience, male, education, married TABLE 7 LONGITUDINAL EARNINGS ESTIMATES by Education and Occupation and Their Relation to Cross-Section Estimates of the Return to Language Knowledge 13 or More Years Education 12 or Fewer Years Education Doctors and Nurses High-Tech Skilled Unskilled Immigrant -0.04(0.03) -0.03 (0.03) -0.08 (0.08) -.003 (0.03) -0.08 (0.03) -0.10 (0.06) Seniority/10 0.28(0.02) 0.14 (0.02) 0.27 (0.05) 0.33 (0.03) 0.14 (0.03) 0.08 (0.03) Seniority/10* Immigrant 0.16 (0.06) 0.09 (0.07) 0.57 (0.16) 0.17 (0.07) 0.09 (0.06) 0.28 (0.13) Change in Hebrew Fluency 0.08(0.01) 0.03 (0.02) -0.02 (0.05) 0.09 (0.02) 0.07 ((0.02) 0.01 (0.03) Change in Knowing English Very Well 0.12(0.02) 0.03 (0.03) 0.14 (0.05) 0.11 (0.03) 0.06 (0.03) 0.04 (0.05) R 0.21 0.08 0.37 0.26 0.09 0.072 Cross-Section Estimates (from tables 4 and 5) Hebrew 0.11 -0.01 0.19 0.10 0.02 0.05 English 0.14 0.07 0.27 0.18 0.09 0.05 Difference Between Cross-Section and Longitudinal Estimates Hebrew 0.03 -0.04 0.21 0.01 -0.05 0.04 English 0.02 0.04 0.13 0.07 0.03 0.01 N 1648 1078 244 993 1141 348 Dependent variable: Change in log wage Additional controls: Experience, male, education, married 27 TABLE 8 LONGITUDINAL ESTIMATES OF THE RETURN TO LANGUAGE KNOWLEDGE by Immigrant Status Hebrew English Very Well Immigrants All 0.07 (0.01) 0.08 (0.03) High Education 0.08 (0.02) 0.11 (0.03) Low Education 0.03 (0.02) .001 (0.04) Natives All * 0.12 (0.02) High Education * 0.13 (0.03) Low Education * 0.06 (0.04) Additional controls: Experience, male, education, married, seniority
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