The Impact of Language Training on the Transfer of Pre-Immigration Skills and the Wages of Immigrants

In this paper, I estimate the impact of language courses on the wages of new immigrants. I develop a model of immigrants' investment in language skills which affect wages directly, but also increase the proportion of pre-immigration skills transferred into the host-country economy. I estimate the model, employing instrumental variables to address the endogeneity of language course participation. Attending language courses for six months leads to an average wage increase of 11.3 percent. The transfer of pre-immigration cognitive skills into the host-country economy accounts for 6.1 percentage points of this increase and the direct channel - for 5.2 percentage points