Learn English, not the Local Language! Ethnic Russians in the Baltic States

Previous immigration literature indicates that one of the most important skills on the labor market is the knowledge of the local language. Different studies suggest that fluency in the language of the destination country is typically associated with 10-30% wage premium (Chiswick and Miller, 1995; Chiswick, 1998; Leslie and Lindley, 2001; Chiswick and Miller, 2002; Shields and Price, 2002; Rooth and Saarela, 2007). The positive association may be related to easier access to better-paying jobs outside of the limited ethnic labor market, or making a minority worker genuinely more productive, for instance through improved communication with customers or colleagues. In order for any of these mechanisms to be employed, one needs both willingness and opportunity for communication. Unless the majority is willing to communicate and work together with the immigrants, the language skills are of little use. The language premium may also depend on the size and sophistication of the minority labor market. A small, mainly low-skilled minority group is unable to create highproductivity jobs in the corresponding ethnic economy and hence the language premium for skilled minority members may be large. The opposite may be true for a large and high-skilled group. The bulk of the studies analyzing the language premium are related to immigrants in developed economies. These studies typically indicate that despite of the substantial wage premium associated with fluency in the local language, it still does not close the immigrant-native income differential (Leslie and Lindley, 2001). The remaining gap is often loosely attributed to country-specific human capital and discrimination. Studies on anglophones in Quebec indicate that French skills are indeed related to income premium, while there is little residual income differential (Albouy, 2008). This outcome can be explained by the fact that both anglophones and francophones