Abstract
This study estimates the causal effects of language proficiency on the economic and social integration of Australian immigrants. Identifying the effects of languages on socioeconomic outcomes is inherently difficult owing to the endogeneity of language skills. Using the phenomenon that younger children learn languages more easily than older children, we construct an instrumental variable for language proficiency. To achieve this, we consider the age at arrival of immigrants who came as children from Anglophone and non-Anglophone countries. We find a significant positive effect of English proficiency on wages and promotions among adults who immigrated to Australia as children. Higher levels of English proficiency are associated with increased risk-taking, more smoking, and more exercise for men, but have considerable health benefits for women. English language proficiency has a significant influence on partner choice and a number of social outcomes, as well as on children’s outcomes, including their levels of academic achievement. The results are robust to alternative specifications, including accounting for between-sibling differences and alternative measures of English skills.
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Notes
One hundred and twenty-eight countries of origin are classified according to the Standard Australian Classification of Countries (SACC), 1998 (http://www.abs.gov.au/AUSSTATS/abs@.nsf/0/1837ADE79569F330CA2572680017FE07?opendocument).
The CIA World Factbook is available online (https://www.cia.gov/library/publications/the-world-factbook/).
We also consider using a parameterization that admits a degradation in language-learning ability that starts at age 12 and grows linearly (Bleakley and Chin 2004). Because the results are qualitatively similar (but less significant) and our sample size is not really sufficient (such a parameterization requires a large number of observations for each age group), we present results using the arrived-young dummy variable in most specifications.
The larger age window is the result of identifying the relationship between partners or between children and their parents.
These results are not reported here but are available upon request from the authors.
The Centrelink delivers a range of government payments and services for retirees, the unemployed, families, carers, parents, and people with disabilities, and provides services at times of major change. The majority of Centrelink’s services are the disbursement of social security payments. Job Services Australia (formerly known as the Job Network) is an Australian Government–funded network of organizations that is contracted by the Australian Government to deliver employment services to unemployed job seekers on government income support payments.
The variation in the IV estimate comes from the instrument, whereas the OLS estimate uses all the variation. If the marginal return to language proficiency affected by the instrument differs systematically from that of the population, then the coefficients estimated using OLS and IV will be different. As can be seen in columns 5–6 and 11–12 of Table 2, the binary instrument is significantly positively related to all levels of English language proficiency. However, the highest coefficient is obtained when moving to the “spoken very well” level of English language skills. Thus, IV will give a higher estimate than OLS if the greatest gains from language proficiency come from later steps toward proficiency.
Measurement errors in the language proficiency measure may affect OLS and IV differently.
We reported the results in an earlier working version of this article, which is available upon request.
IMR can be found online (http://www.gapminder.org/documentation/documentation/gapdoc002.pdf), and GDP per capita comes from Maddison (2012).
The schooling quality variables are from Barro and Lee (2001).
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Acknowledgments
We thank Alicia Adsera, Claudia Senik, Steven Stillman, Hee-Seung Yang, Paul Miller, Amee Chin, Chau Nguyen, Abdurrahman Aydemir, Deborah Ann-Cobb Clark, and participants at the HILDA conference in 2013 and at the University of Melbourne-Princeton University Workshop on International Perspectives on Immigration, as well as seminar participants at Flinders University, Monash University, and Bilkent University for comments and suggestions on earlier drafts. Any remaining errors are our own. Islam gratefully acknowledges funding support from the Australian Research Council (DE120101588).
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Guven, C., Islam, A. Age at Migration, Language Proficiency, and Socioeconomic Outcomes: Evidence From Australia. Demography 52, 513–542 (2015). https://doi.org/10.1007/s13524-015-0373-6
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DOI: https://doi.org/10.1007/s13524-015-0373-6