Finance & Development, September 2016, Vol. 53, No. 3

Barry R. Chiswick

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The economics of language offers important lessons for how Europe can best integrate migrants

European countries admitted more than a million migrants from North Africa and the Middle East in 2015, primarily from the conflicts in Syria and Iraq. Some are refugees fleeing civil war, discrimination, and chaotic situations. Others are economic migrants seeking better opportunities. The vast majority of both types of predominantly Arabic speakers will settle permanently in Europe, where Arabic is not the dominant language but where substantial enclaves of Arabic speakers live. Although some of these immigrants will be proficient in their host country’s language, most will not.

The recent surge in international migration has focused attention on the economics of language: the determinants and consequences—including prospects for employment and earning potential—of migrants’ proficiency in their host country’s language. The economic success of migrants depends heavily on how well and quickly they learn the language of their new country.

Theoretical and empirical research, both my own and by colleagues in the field, has benefited from the relatively recent release of large microdata sets in the major immigrant-receiving countries, which identify immigrants, their original language, and their proficiency in the host country’s main language, along with other relevant social, demographic, and economic characteristics.

Picking it up

Language proficiency is a form of human capital, just like other skills acquired in school or on the job. It is an economic good that is useful professionally, personally, and socially and is acquired at a cost to individuals—in the case of children, to parents or caregivers—of time and financial outlay. Although the effects vary somewhat across countries, immigrants who are more proficient in the host country language are more likely to be employed, when employed earn more, are more likely to become citizens, and have a higher propensity to marry someone born outside of their country of origin or ethnic group.

Research on the determinants of immigrants’ proficiency in the host country language—conducted for several migrant-receiving countries, including Australia, Canada, Germany, Israel, the United Kingdom, and the United States—has focused on the “four E’s”: exposure, enclaves, efficiency, and economic incentives.

Exposure to the host language can occur before or after migration. People may learn a language before migrating through formal or informal language training programs or via media and Internet exposure. Exposure after migration might also include formal or informal language training programs, but learning by living, typically measured by how long a person has lived in a new country, is the most effective method of language acquisition. An interrupted stay, perhaps from migrating to and fro (by sojourners or so-called birds of passage, who return home with their savings every year or so), or the expectation of only a temporary migration dulls the incentive to acquire proficiency. Mexican migrants in the United States, for example, tend to be less proficient in English than similar migrants, in part because they are more likely to migrate to and fro.

Enclaves: Living and working within an ethnic enclave and associating with people who speak their language eases the transition for newly arrived immigrants but comes at a cost. Linguistic, networking, and other adjustments to the new country take longer. What may be a benefit in the short run can become a disadvantage over time.

Language is often closely connected to cultural preferences or ethnic goods consumed primarily by members of an ethnic community and seldom by others. These include ethnic foods (halal meats, for example) and clothing (saris). Language binds those who belong to ethnic houses of worship, social clubs, friendship networks, and marriage markets. Living among others with a similar linguistic background and a demand for similar ethnic goods lowers the cost of living and encourages the emergence of ethnic communities or enclaves. For immigrants from India, for example, the cost in terms of money or time of buying a sari or attending a Hindu temple is lower the more competition there is among providers and the greater the number and variety of choices. Yet ethnic enclaves often suffer disadvantages in housing, sanitation, and security due to limited host government spending.

The emergence of such enclaves among immigrants depends not only on the number of migrants relative to the native population and their geographic concentration, but also on how diverse their languages are. A linguistically homogenous migrant inflow is more likely to generate a linguistic enclave than a similarly sized stream of migrants speaking a variety of languages. And living and working in a linguistic enclave is easier if the migrant’s language is spoken by many in the destination. It is much easier to avoid or minimize contact with the destination language if neighbors and colleagues speak the new migrant’s language and if media, social contacts, and job networks are available in that language as well. For example, a newly arrived migrant Basque speaker in Germany would find few people to communicate with in Basque, but a newly arrived migrant Turkish speaker would find a large, well-established community of Turkish speakers.

Efficiency is the ability to convert exposure to a new language into greater proficiency. Age is a primary determinant of efficiency. Young migrants can acquire host country language skills more quickly and precisely than older migrants. Education increases efficiency in acquiring new languages, as it does with other skills. Another efficiency factor is linguistic proximity—how close the person’s original language or mother tongue is to the destination language. For example, Italian is linguistically closer than Chinese to French, so Italian immigrants to France have an easier time than Chinese immigrants learning French.

Economic incentives are the final important factor affecting whether or how quickly a migrant becomes proficient in the host country language. The economic incentives to learn a language are stronger if a person expects a long and uninterrupted stay. Tourists and sojourners are less motivated than permanent immigrants to learn the destination language. The benefits from learning the destination language also vary by skill or schooling level. More highly skilled people tend to work in jobs that require destination language proficiency, but this is less important for those in many low-skill jobs. Immigrant engineers and technicians generally need a degree of proficiency in the destination language for their skills to be productive, but janitors and porters may not.

A first-generation problem

Fortunately, limited proficiency in the host country language is primarily a first-generation-immigrant problem. The use of the heritage language tends to disappear in successive generations, for better or for worse. Attending school and exposure to media in the host language, and playing with other children who don’t speak the heritage language, hasten both the acquisition of the new language and the loss of the heritage language by the second or third generation. The disadvantage is that this decreases ties to a person’s heritage and to relatives who did not migrate.

The children and grandchildren of immigrants can become fully proficient in the host country language while maintaining the heritage language. This is more likely if they grow up among family members and neighbors who speak the heritage language, if print and electronic media are available in that language, and if they stay in touch with relatives left behind. When children born in the new country live in enclaves, whether defined by geography or language, heritage languages tend to persist longer.

The downside is that these speakers often have lower earnings than monolingual English speakers. This has been found, for example, among men born in the United States who speak Spanish, Yiddish, Pennsylvania Dutch, or Native American languages at home as their second language in addition to English. The Spanish speakers have 20 percent lower earnings overall, and when other determinants of earnings—including schooling, age, and weeks worked—are the same, they still make 7 percent less.

Languages closely associated with the practice of a religious minority tend to persist longer in the destination country, even among second- and subsequent-generation descendants whose mother tongue is that of the host country.

The worth of a language

How important is it for labor market success to learn the language of the host country? The short answer is it matters a lot. The probability of being employed—and their earnings when employed—increases with migrants’ proficiency in the host country language, along with how long they have lived in the country and their level of schooling, among other things. Proficiency’s effect on earnings is estimated to equal about three additional years of schooling.

The more the skills—acquired in their country of origin—migrants bring with them match those needed for jobs in their new country, the higher their earnings. Earnings increase with length of time in the country, rapidly at first and then more slowly. This happens partly because migrants acquire credentials, networks, and experience relevant to their new labor market, but also because of improved language skills. Migrants might find employment in a linguistic enclave, but because there are fewer job opportunities their earnings tend to be much lower than in the general job market.

Tools for change

Public policy can influence a migrant population’s language proficiency. It can do this by favoring the applications of immigrants who have already mastered the host country language, as in the case, for example, of English and French in Canada.

Policies that favor young adult and more highly educated immigrants who are not geographically isolated in migrant enclaves but live among the general population result in a more proficient and higher-earning immigrant population. Such policies have been successful in Australia and New Zealand. Policies that encourage permanent, rather than back-and-forth, migration—perhaps by encouraging immigration of entire families, promoting citizenship, or facilitating employment of the primary migrant’s spouse—can enhance family income and discourage return migration.

Encouraging immigrant flows among migrants with exposure to the destination culture and language, such as residents of former colonies (as the United Kingdom has done), and with languages linguistically close to that of the destination also promotes proficiency.

In refugee immigration flows, the destination country may have little say in the choice of migrants, but public policy can still influence their language skills. Postmigration provision of subsidized training in the destination language, emphasizing both speaking and literacy, naturally enhances the skills of new arrivals. The Israeli ulpan system of subsidized language training for the intensive study of Hebrew has been particularly successful. Such language training is voluntary, free of charge, and accompanied by stipends to support the enrollees and their families. It focuses on speaking and literacy skills for everyday living as well as employment-related skills and cultural acclimatization. The ulpan program is relatively expensive, but the payoff is large both for participants and for society as a whole.

Lessons for Europe

These policy recommendations are supported by numerous empirical studies for a variety of immigrant-receiving developed economies and have significant implications for the European countries accepting migrants today. The challenge to Europe is intensified by high unemployment rates and labor market restrictions.

Compared with North America and Australia, Europe does not have a particularly good track record when it comes to integrating migrants into its linguistic, social, and economic life. If the recent wave of newcomers from North Africa and the Middle East join linguistically homogenous enclaves, whether by choice or by government settlement policy, their linguistic isolation will persist. This has negative implications for people’s economic prospects and raises the potential for criminal activity and radicalization.

Two types of training programs are needed: general training in the host country language and culture and job training to give migrants the linguistic skills and credentials they need in order to use previously acquired skills. Host countries need policies that validate previously acquired job-related credentials and reduce other barriers to employment without weakening domestic health and safety standards.

Many migrants will still lack the relevant skills for the technologically advanced economies of Europe and many will struggle to acquire the host country language. These difficulties increase with the age of migrants when they reach their final destination and the greater their geographic and social isolation from the job market—important considerations for policymakers.

Linguistic assimilation—acquiring proficiency in the destination language without necessarily abandoning one’s heritage language and culture—is critical for the social, cultural, political, and economic integration of migrants, including refugees. And Europe can be more successful than it has been in promoting linguistic assimilation—if it has the will to do so. ■

Opinions expressed in articles and other materials are those of the authors; they do not necessarily reflect IMF policy.