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The impact of host language proficiency on employability and workplace language use

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Treballs Finals del Màster d'Economia, Facultat d'Economia i Empresa, Universitat de Barcelona. Curs: 2023-2024, Tutor: Antonio Di Paolo

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The paper investigates the impact of Spanish language proficiency among immigrants on employability and the use of Spanish in the workplace in Spain, using data from the "Encuesta de Características Esenciales de la Población y las Viviendas" which complements the 2021 census. Employing an Instrumental Variable (IV) strategy based on the critical period hypothesis of language acquisition, we refine the methodological approach by considering the mother tongue effects of immigrants and enhancing the exogenous assignment of Spanish proficiency through the instrument. Contrary to previous findings in Spain, the IV results suggest that Spanish proficiency does not significantly affect employment probability. However, proficient individuals show a substantial increase in the use of Spanish in the workplace, with slightly heterogeneous effects by sex. Correcting for endogeneity and classification error, Spanish-proficient immigrants present a significantly higher workplace host language use. The findings suggest a considerable downward bias in the OLS estimates, indicating that the effect of Spanish proficiency results in much greater integration benefits in the workplace, measured by host language use on the job. The study underscores the role of language in facilitating labor market integration by examining a new labor market integration outcome in a recent context. Our findings provide nuanced insights into immigrant labor market dynamics, offering valuable implications for policymakers aiming to foster inclusive workplaces.

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The impact of host language proficiency on employability and workplace language use