Abstract
This thesis is composed of three chapters, which can be read as separate papers, and aims to contribute to the research on the impact of language skills on individuals and firms. The first two papers concentrate on the acquisition of foreign languages, observed through the common lens of human capital theory, and thus can be intended as separate parts of a broader analysis on foreign language skills, education, and the labor market. The third chapter adopts a different approach instead and explores language as a means of communication between individuals in organizations. The first chapter uses European cross-sectional data from 2007 and 2011 to explore the role of compulsory education in building foreign language knowledge of European adult natives. The identification relies on reforms introducing foreign language teaching in compulsory education in a set of European countries, which generates treatment variations across birth cohorts and countries. Results indicate that being taught foreign languages during compulsory schooling has positive effects on adults’ language skills. The second chapter builds upon the conceptual result of the first one and investigates the effects of the investment in foreign languages on several labor market outcomes. Employing European cross-section data from 2011 and 2016, the introduction of language teaching in compulsory schooling is evaluated on its effects on employment, occupational status, and related wages of native males and females in Europe. Results indicate that additional language skills do not increase labor-force participation of either men or women. On the other hand, female workers exposed to compulsory language classes access better jobs and earn higher wages. The absence of similar effects for the male workforce suggests that compulsory language education may play a role in reducing gender differences in both occupational attainment and wages. The third chapter is concerned with modeling the effect of communication skills on organizational languages. Given the complexity of the matter, the organizational code is studied in a simplified, monolingual framework of a team composed of a generalist and a specialist agent. The correct transmission of information depends on the generalist agent’s communication skills and the precision of the code used. Results indicate that an increase in communication skills of the generalist agent allows the team to use more precise code and reduces the diagnosis costs of the specialist agent.