# Complementarities of occupations and language skills of immigrants in Europe

## TL;DR

This study finds that language skills and job types interact in determining immigrant income in Europe, with different benefits for blue-collar and white-collar workers.

## Contribution

The study reveals complementarities between language proficiency and occupation, showing how language skills interact differently with job types.

## Key findings

- Including English skills increases the estimated returns to local language proficiency for immigrants.
- Medium-skilled blue-collar jobs reward fluency in both the local language and English.
- White-collar jobs only reward English language knowledge for higher income.

## Abstract

We study the returns to language skills of immigrants using the European Adult Education Survey (2016). We estimate a standard income equation augmented by self-reported proficiency levels in the host country’s language and in English. Contrary to earlier literature, we find that the inclusion of English skills of immigrants increases the estimated returns to proficiency in the local language. Next, considering heterogeneous effects across occupations, we find significantly positive returns to language proficiency only for medium-skilled occupations. Among those, blue-collar jobs reward fluency in both the local language and English. Whereas in white-collar jobs, only the knowledge of English yields significantly higher income. These estimates are consistent with occupational sorting of immigrants and suggest that there are complementarities between proficiency in languages and job skills for some occupations. Following earlier literature, we also corrected the potential endogeneity bias in host-country language skills using instrumental variable methods. Our findings could be relevant for immigration policies in Europe.