We examine the effect of language acquisition on the growth of immigrants' earnings. We gathered data on recent Soviet immigrants to Israel that include retrospective questions on earnings and language ability on entry into their current job. Language acquisition is found to interact positively with occupation level. Immigrant programmers and computer technicians have a return to tenure about three percentage points higher than that of natives; improved Hebrew language skills account for between 2/3 and 3/4 of that differential wage growth. In contrast, construction workers and gas station attendants have no convergence of wages to those of natives and language acquisition has no discernible effect on their wages. For these less skilled workers the estimated "return" to Hebrew proficiency in the cross-section is entirely due to ability bias. This finding may invite a reinterpretation of other studies on the returns to language acquisition for low wage immigrants.
We examine the effect of language acquisition on the growth of immigrants' earnings. We gathered data on recent Soviet immigrants to Israel that include retrospective questions on earnings and language ability on entry into their current job. Language acquisition is found to interact positively with occupation level. Immigrant programmers and computer technicians have a return to tenure about three percentage points higher than that of natives; improved Hebrew language skills account for between 2/3 and 3/4 of that differential wage growth. In contrast, construction workers and gas station attendants have no convergence of wages to those of natives and language acquisition has no discernible effect on their wages. For these less skilled workers the estimated "return" to Hebrew proficiency in the cross-section is entirely due to ability bias. This finding may invite a reinterpretation of other studies on the returns to language acquisition for low wage immigrants.
Using a unique sample of Russian immigrants and native Israelis, we examine the return to English knowledge. Panel and cross-section estimates of the return to English are substantial for highly educated immigrants and natives. Hebrew and English language acquisition contribute to immigrant/native earnings convergence, but most convergence is explained by other factors. While immigrants with low levels of education do not benefit from knowing English, native Israelis may. Conditional on occupation, English and Hebrew acquisition are largely orthogonal. Therefore earlier work on the importance of knowledge of the host-country language (Hebrew) is not significantly biased by unmeasured English knowledge.
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