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IZA Discussion Paper No. 1098
March 2004
Nonparametric Bounds on the Returns to Language Skills

published in: Journal of Applied Econometrics, 2005, 20 (6), 771-795

This paper applies the theoretical literature on nonparametric bounds on treatment effects to the estimation of how limited English proficiency (LEP) affects wages and employment opportunities for Hispanic workers in the United States. I analyze the identifying power of several weak assumptions on treatment response and selection, and stress the interactions between LEP and education, occupation and immigration status. I show that the combination of two weak but credible assumptions provides informative upper bounds on the returns to language skills for certain subgroups of the population. Adding age at arrival as a monotone instrumental variable also provides informative lower bounds.

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Mark Fallak
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+352 585-855-526
World of Labour
Olga Nottmeyer
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+352 585-855-501
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The IZA@LISER Network is a global community of scholars dedicated to excellence in labor economics and related fields, now coordinated at the Luxembourg Institute of Socio-Economic Research (LISER) following its transition from Bonn.

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