English deficiency and the native-immigrant wage gap

Summary

We focus on the effect of English deficiency on the native-immigrant
wage gap for employees in the UK using the first wave of the UK
Household Longitudinal Survey (Understanding Society). We show that the
wage gap is robust to controls for age, region of residence, educational
attainment and ethnicity, particularly for men. However, English as
Additional Language (EAL) is capable of explaining virtually all the
remaining wage gap between natives and immigrants. Using the interaction
of language of country of birth and age-at-arrival as instrument, we
find strong evidence of a causal effect of EAL on the native-immigrant
wage gap.