Camilo Santa Cruz
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January, 2024

Economic returns of bilingualism in Costa Rica. Evidence for 2010 - 2023

Citation: Santa Cruz - Camacho, C. (2024). Economic returns of bilingualism in Costa Rica. Evidence for 2010 - 2023. Seminar in Labor Economics and Public Policy. Working paper. https://rpubs.com/camilosc1695/bilingualismcr

Abstract

Proficiency in Foreign Language Skills (FLS) is recognized as a form of Human Capital that has acquired increasing significance in the Costa Rican economy. This importance stems from the country’s strategic efforts, initiated over 25 years ago, to facilitate integration into international markets and attract high-tech companies. This study explores the economic benefits of possessing proficiency in a second language. Employing a multiple linear regression analysis with Pooled Cross-Sectional data, the primary objective is to identify the benefits of acquiring an additional language, both in terms of employment condition—whether the person is employed or not—and through the identification of a wage premium associated with mastering Foreign Language Skills. Even after controlling for factors such as region, industry, educational attainment, occupation, and other human capital variables, a positive relationship between Foreign Language proficiency and wage premium persists. There is insufficient evidence to suggest that proficiency in Foreign Language Skills alone determines occupational condition. However, the preliminary findings indicate economic returns associated with the command of Foreign Language Skills of values that fluctuate between 3000 dollars and 13.000 dollars.

Keywords

Wage premium, Propensity Score Matching, Foreign Language Skills, knowledge economy