Language Skills the Key to Labour Market Integration

In the National Education Panel and the PIAAC study, knowledge of German was measured using standardised tests, ensuring good comparability and accuracy of data. However, recent immigrants are not included in these datasets. The Socio-Economic Panel does cover the newly arrived, but only contains self-assessments of their language level. The National Educational Panel and the Socio-Economic Panel fail to find any wage differences between immigrants and natives when language skills and formal educational attainment are controlled for. In the PIAAC study, wage differences are so small as to be of scarce practical relevance. For unemployment there is no uniform picture. However, here too the results suggest that language skills are a decisive factor. On average, highly qualified immigrants perform better in the German tests than the low-skilled without a migration background. Language problems are therefore not exclusive to members of migrant families. In certain cases the indigenous population would also benefit from courses in basic literacy to improve their language skills.