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The Economic Value of Language Acquisition

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Project Leader
Swidinsky, Robert   

Many parents believe that language acquisition will give their children an advantage in the labour market in terms of both greater employability and higher earning power. These economic benefits, if true, would add to other, non-pecuniary, benefits that derive from language acquisition. The objective of the proposed study is to assess the effect of diverse language skills on economic performance. Language skills may take many forms. For example, a child can be taught a single official language, both official languages, or an official language and one or more heritage languages. How do these combinations of language skills affect the social and economic lives of children? Is the economic pay-off to multiple language skills sufficient to warrant the investment in language training? Is fluency in an additional official language a contributor to economic success? While the proposal does not address all of the relevant issues, it does address some of the more fundamental questions. This work should be of interest to not only parents and educators but to policy makers as well, given Canada’s many language and multiculturalism programs. Specifically, our research involves four projects, in various stages of completion. Project #1: Language in the Public Service The Official Languages Act proclaims the equal status of English and French in all the institutions of the Parliament and Government of Canada. This Act obliges the federal public sector to offer services in both official languages if there is sufficient public demand; all positions are designated as unilingual English, unilingual French, or bilingual. Roughly one-third of all federal public service positions are designated as bilingual. In all other sectors (non-federal and private), French is the dominant official language in use in Quebec, while English is the dominant official language in use in the rest of Canada. There is a considerable economics literature showing that earnings in the public sector are higher than in the private sector. The question we address is whether this result holds for the more narrow federal public service and, if so, whether the federal public service advantage depends on linguistic proficiency. In our analysis we study the changes in relative earnings of four groups of paid workers, differentiated by public-private sectors and bilingual status. We employ a difference-in-difference approach, using micro data from the 1986, 1991 and 1996 Census. Our OLS results show that the bilingual premium net of productivity characteristics is considerably higher in the public than private sector, but that the difference has narrowed during the 1990's. This likely reflects a higher supply of bilingual workers. These results are unchanged when we adjust the wage equations for sample selection using the Bivariate Probit model. These findings suggest that the Official Languages Act has had a significant positive effect on the earnings of bilingual workers in the federal public service. The completed study appears as University of Guelph, Department of Economics, Discussion Paper 2004-2; it is currently being reviewed for possible publication in a refereed economics journal. Project #2: The Economics of French Immersion Schooling According to educators, French Immersion (FI) schooling is an educational success story. FI teaches children a second official language without any apparent cost in terms of literacy in the English language; some observers have even argued that FI improves English language literacy and general cognitive skills. There is also a wide-spread belief, although seldom made explicit, that bilingual children will have a competitive advantage when they enter the labour market. We explore the effects of bilingual language skills on labour market outcomes, focusing on choice of occupation, choice of sector of employment, and labour market earnings. The data source is the individual microdata file from the 1996 Census. The results we obtain from multinomial logit analysis of occupational and sectoral choices show that bilingual individuals are more likely to enter managerial/professional occupations and to seek employment in the broad public sector. There is also evidence, based on OLS analysis, that paid workers who are bilingual earn significantly higher wages. However, there are a number of qualifications. Men and women earn a bilingual wage premium only if they are employed in managerial/professional occupations in the public sector in Ontario, Quebec, and Atlantic Canada. Moreover, bilingual wage effects are strongest among middle aged and more highly educated workers. although this study is nearing completion, we will delay publication until we can replicate our findings using microdata from the more recent 2001 Census. This data should be available by the fall, 2004. Project #3: Language, Literacy and Earnings The limitations of the data used in Project #2 forces us to overlook the fact that language fluency is self-reported, there is no information on language at work, children are screened for compatibility before being admitted into French Immersion programs, and children enrolled in Frenh Immersion programs overwhelmingly come from higher-income, better-educated families. All of these factors have a bearing on labour market success. Since we cannot control for these factors, the finding that bilingual language skills have a positive effect on labour market outcomes may be misleading. The essential task is to find data that will allow us to control for language fluency, language at work, ability, and family effects. The 1994 International Adult Literacy Survey (IALS) may allow us to address some of these issues; this data set may also allow us to address a number of other questions centering on language, literacy, education, and labour market outcomes. Our research assistant, Jonathan Hull, is currently working on this project, using the IALS data available through the SWORDC. This research will also form the basis for the research project he requires to complete his M.A. degree. Project #4: Literacy and Earnings: A Study of Immigrants in Ontario The objective of this study, conducted by Hai Yang to fulfill the requirements for his M.A. degree, is to examine the effect of quantitative and document literacy on the relative earnings of immigrants in Ontario. The source of data is the 1998 Ontario Adult Literacy Survey. The study finds that both quantitative and doccument literacy have a significant effect on the observed earnings gap between immigrants whose mother tongue is English and those whose mother tongue is a heritage language. This effect is present even after controlling for education, work experience, years since migration, age at migration, industry and occupation. The effect is most pronounced for immigrants from Eastern Europe, Asia and Latin america. The study also finds that the earnings effect of literacy tends to increase with the level of formal schooling. This project was completed in December, 2003.

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