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Language fluency and earnings: Estimation with misclassified language indicators

Dustmann, C; van Soest, A; (2001) Language fluency and earnings: Estimation with misclassified language indicators. REV ECON STAT , 83 (4) 663 - 674. Green open access

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Abstract

We use panel data to analyze the determinants of speaking fluency and wages of immigrants. Our model takes account of two problems that may bias OLS estimates of the impact of speaking fluency on earnings. First, subjective variables on an ordinal discrete scale, such as self-reported language ability, can suffer from misclassification errors. The model decomposes misclassification errors into a time-persistent and a time-varying component. Second, the model accounts for correlated unobserved heterogeneity in language and earnings equation, The main finding is that these two generalizations of the standard model both lead to substantial changes in the estimated effect of speaking fluency on earnings.

Type: Article
Title: Language fluency and earnings: Estimation with misclassified language indicators
Open access status: An open access version is available from UCL Discovery
Keywords: SAMPLE SEPARATION INFORMATION, IMMIGRANTS, PROFICIENCY, SPEAKING, MODELS, MARKET, MEN
UCL classification: UCL > Provost and Vice Provost Offices
UCL > Provost and Vice Provost Offices > UCL SLASH
UCL > Provost and Vice Provost Offices > UCL SLASH > Faculty of SandHS > Dept of Economics
URI: http://discovery.ucl.ac.uk/id/eprint/12629
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