THE WAGE BENEFITS FROM LANGUAGE SKILLS IN A GLOBALIZED LABOUR MARKET

The globalization of labor markets makes language skills one of the key competences required by employers nowadays, and especially by multinational companies operating in the global market. Based on the human capital theory we can expect that language skills should have a positive impact on productivity and earnings. This should be the case both for those working domestically and those working aborad. Our purpose is to determine whether language skills have an impact on the earnings of Poles. The Poles seem to be a good case for this type of analysis, because the Polish language is not used for international communication, while as much as 58% of Poles declare to command at least one foreign language and 5% of Poles earn their income abroad. We estimated an extended Mincer wage equation using OLS and the Heckman correction for self-selection to employment. The analysis was based on data from three waves (2012-2014) of the Human Capital Balance survey with a pooled sample of about 35,000 individuals. Analysis shows that the command of foreign languages has a strong, positive impact on earnings. The wage premium from the advanced command of a foreign language amounts to 6% in case of employment in Poland and 22% for those working abroad. Interestingly, those working in Poland earn a much higher wage premium from proficiency in Spanish (29%), Italian (20%) or French (19%) than from proficiency in English (8%). In turn, English is the only foreign language which brings a wage premium to Poles working abroad.