Matching Language Proficiency to Occupation: The Effect on Immigrants' Earnings

This paper analyzes the effect on earnings of the matching of English language skills to occupational requirements or occupational norms for adult male immigrants. It uses data from the Occupational Information Network (O*NET) database and a “Realized Matches” procedure to quantify expected levels of English skills in each of over 500 occupations in the US Census. Earnings data from the 2000 US Census for foreign-born adult male workers are then examined in relation to these occupational English requirements or norms using the Over/Required/Under (or ORU) technique developed for the study of schooling. The analyses show that earnings are related to a “correct” matching of an individual’s language skills with what is expected in his occupation. Mismatches have a small effect on earnings – positive for extra proficiency and negative for deficits in proficiency, relative to the norm in the occupation. The findings are robust with respect to a range of measurement and specification issues.