Abstract
We analyze the relationship between the local language skills and immigrant income in a largely bilingual economy, Estonia. We show that the official language matters little in the private sector, and at the upper end of the income distribution. This is in a striking contrast to what has been found in the literature for single-language dominated economies. Our results point toward importance of co-worker discrimination, possibly through the more subtle aspects of language, or through access to the social networks. This outcome stresses the need of social integration of minorities, and suggest that this does not necessarily happen through the labor market.
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