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We focus on the effect of English deficiency on the native-immigrant wage gap for male employees in the UK using the first wave of the UK Household Longitudinal Survey. We show that the wage gap is robust to controls for age, region of residence, educational attainment and ethnicity. 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 [an] instrument, we find strong evidence of a causal effect of EAL on the native-immigrant wage gap.

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[The authors] investigate the extent to which deficiency at English as measured by English as Additional Language (EAL), contributes to the immigrant-native wage gap for female employees in the UK, controlling for covariates. To deal with the endogeneity of EAL and a substantial problem of self-selection into employment [the authors] suggest a 3-step estimator (TSE). The properties of this estimator are investigated in a Monte Carlo simulation study and [the authors] show evidence that TSE delivers a consistent and asymptotically normal estimator. [The authors] find a large and statistically significant causal effect of EAL on the immigrant-native wage gap for women.

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