The causal effect of deficiency at English on female immigrants’ labour market outcomes in the UK

Summary

Using the first wave of the UK Household Longitudinal Survey, we investigate the extent
to which deficiency at English as measured by English as Additional Language (EAL),
contribute to the immigrant-native wage gap for female employees in the UK, after
controlling for age, region of residence, educational attainment and ethnicity. We allow
for endogeneity of EAL and correct for bias arising from self-selection into employment
using a 3-step estimation procedure. We find very strong evidence of negative selection
of EAL into employment. Moreover, we also present evidence of self-selection bias on
the wage equation, which if uncorrected, would result in significant underestimation of
the causal effect of EAL on the immigrant-native wage gap for women.