Learn a Language, Get a Raise

Feb. 28, 2008— -- Mastering a foreign language is a tough slog. For the 1.5 million college students hunched over a foreign language textbook, spending hundreds of hours trying to perfect their Spanish or French, their studies are meant to be a promising investment. Increased pay and plum jobs have long been dangled before students as an incentive for bilingualism.

But if American students think they are going to command a much higher salary after graduation because of their language skills, they are in for disappointment.

Spanish, for example, is far and away the most popular foreign-language class in American colleges, but bilingual job seekers earn the smallest wage premium. In 2006, there were roughly 823,000 American students enrolled in Spanish courses--accounting for 52% of all enrollments--according to the Modern Language Association (MLA). But bilingual Spanish speakers earned only a 1.7% wage premium.

Click here to learn more about the most popular foreign languages at our partner site, Forbes.com.

Calculating the exact value of learning a second language has vexed economists. For example, it is difficult to separate the wage increases associated with learning a foreign language from other, closely co-related variables like education and motivation.

Still, some economists have tried. In 2005, Albert Saiz, an economist at the University of Pennsylvania, and Elena Zoido, an economist at the consulting group LECG, published a study comparing wage premiums for American college graduates who spoke Spanish, French, German, Italian, Russian and Chinese as a second language.

In their findings, the law of supply and demand prevailed. With its 1.7% wage premium, Spanish was the least valuable, followed by French (2.7%). Knowledge of German, Italian, Russian and Chinese was slightly more valuable, translating into an average 4% income boost.

Those gains are paltry compared with simply staying in school a bit longer. In the same study, Saiz and Zoido found that an extra year of schooling yielded an 8% to 14% wage premium.

Of course, learning to speak a foreign language is not just about increasing one's income. It's silly to try to put a dollar value on the ability to read Sartre in the original French or chat about the latest telenovela in a café in Bogotá.

But if income maximization is the key, savvy college students would do well to learn high-demand languages instead. According to the MLA, enrollments in Chinese and Arabic between 2002 and 2006 spiked by 51% and 127%, respectively. Enrollments in Spanish courses during the same time increased by only 10.3%.

In addition to Chinese and Arabic, the top 10 most popular languages for American college students include Japanese, Latin, and Russian. American Sign Language is actually the fourth most popular language course, but when excluded from the list of foreign languages, ancient Greek slips into the top 10 with roughly 22,850 enrollments.

Ambitious students with an interest in geopolitics can try taking up Swahili, Urdu, Farsi and Bahasa Indonesian. These are among the FBI's most sought after foreign language skills.

But no matter which language they study, the income gains for native English speakers learning a foreign tongue are tiny compared with the gains for non-English-speaking immigrants who learn English.

Aimee Chin, an associate professor in the economics department at the University of Houston, has found that immigrants to the U.S. who transition from speaking English "well" to "very well" have seen their wages rise by 30%.

Chin's research, published in 2003, evaluated earnings of individuals who had emigrated to the U.S. as children and eventually entered the job market. Chin and her co-author found that compared to a person who speaks English poorly, those who have mastered it earn 67% more.

The disparity between earnings for bilingual native-English speakers and immigrants is no surprise to Chin. "For Americans, a [foreign] language isn't used as widely in the business world," she says, "so we don't get a big premium for it."

So at least for the foreseeable future, monolingual American students shouldn't stress about employment possibilities.

While Chinese and Spanish are becoming global languages, the demand will rise at the same pace as supply. This dynamic, according to Boston University economics professor Kevin Lang, is what makes English so valuable.

"We're not talking about dramatic differences," says Lang. "It's not the case that if you don't speak Mandarin in 20 years you'll be relegated to flipping hamburgers."