The acquisition and labor market value of four English skills: new evidence from NALS

ARTURO GONZALEZ [*] This study investigates the factors related to proficiency in understanding, speaking, reading, and writing English among immigrants using data from the 1992 National Adult Literacy Survey (NALS). It also investigates the earnings-English relationship for each of these four skills to establish which is more valuable in the labor market. English as a Second Language (ESL) courses, education, and years in the United States are found especially to affect English proficiency. Furthermore, the returns on oral proficiency are greater than the returns on literacy skills, although writing skills are more valuable than reading skills. The study concludes that English acquisition is a dynamic process, rather than static as argued by supporters of English-only legislation. An increased role for ESL courses in the acquisition of English is suggested as an alternative policy to English-only laws as long as the marginal cost is less than the marginal benefit. (JEL J00, J24, J61) I. INTRODUCTION Of the 25.8 million immigrants in the United States in 1997, 62% arrived after 1979 (U.S. Census Bureau, 1998), with the majority of these immigrants hailing from non-English-speaking countries in Latin America and Asia. It is not surprising, then, that recent immigrants have lower initial levels of English ability, as well as lower levels of education, than previous immigrants and their Western European counterparts (Funkhouser, 1996). These initial lower English skills have generated perceptions that the new immigrants are refusing to learn English, and thus creating permanent cultural and linguistic divisions in the country (King, 1997). If recent immigrants are less likely to learn English voluntarily, then some argue that English-only laws will increase the English proficiency of immigrants. Acting on this belief, four bills to make English the official language were introduced by the 106th Congress (H.J. RES.21, H.R.50, H.R.123, H.R.1005). However, none of these proposed laws was based on research that demonstrates a need for them, nor was it clear whether these laws would actually increase the English proficiency of immigrants. The present study informs this debate by examining the factors associated with English proficiency and its labor market rewards using a more detailed data set than those available to past researchers. Economic theory states that immigrants learn English as long as incentives exists to do so. Aside from nonpecuniary social benefits, one incentive is greater labor income. Immigrant wage studies that use data from national surveys, such as the Census and Current Population Survey (CPS), commonly find that self-reported English-speaking proficiency is associated with higher earnings. For example, Hispanic immigrants who do not speak English earn 17% less than immigrants who speak English (Borjas, 1994). Furthermore, studies of immigrant earnings find that the immigrant wage assimilation is explained by the increase in English-speaking skills resulting from more time in the United States (Funkhouser, 1996; Carliner, 1995). Although the extent of assimilation is a matter of debate (see, e.g., Tienda and Liang, 1994), immigrants desiring to move from service and blue-collar occupations into white-collar and professional occupations must have adept and varied English skills. For example, newly arrived immigrants with limited command of English may be able to function in factory or agricultural jobs, but immigrants in professional occupations require high levels of vocabulary and literacy skills. The value added of greater English skills is potentially high. Immigrants who can read or write, therefore, would be expected to enjoy greater economic opportunities than immigrants who can only understand and speak small amounts of English. It is important, then, to examine the productivity effects of various dimensions of English. It is likely, then, that other types of English proficiency besides speaking are also important in the labor market. …