Research

The Wage Premium of English Proficiency in Europe and Comparable OECD Countries

This page sets out the research behind our claim that strong business English is linked to up to ~50% higher pay. It reviews the European and OECD-adjacent labour-market studies that estimate the wage return to English – what they find, how they measure it, and the caveats that come with it.

Executive summary

Based on the strongest European and OECD-adjacent micro studies that provide direct wage estimates, English proficiency is typically associated with a clearly positive wage premium. However, the magnitude depends heavily on the country, the worker group, the skill level, and the identification strategy examined by the research. The most stable estimates from broader samples in Germany and Poland are generally around 8–13%, while older country-level EU estimates based on IV/GMM methods also show values of about 15–39%, partly because English was relatively scarce in those countries. In Turkey, the return to English rises steeply with skill level, and the strongest estimates based on advanced English or English used intensively at work exceed 40–50%.

Methodologically, the clearest pattern is that simple OLS estimates usually show a smaller premium than IV/GMM estimates or methods that improve the handling of self-selection. In the Spanish immigrant sample, the IV estimate for English is much larger than the OLS estimate; the GMM estimates for nine EU countries are also larger than OLS estimates; and in Turkey, IV interval-regression estimates that address endogeneity are again higher than conventional models. At the same time, when researchers also control for occupation or workplace use, the language premium generally falls. This suggests that English is priced partly through access to better occupations and positions.

Very few studies measure “business English” directly. The best proxies in this evidence base are advanced or proficient English, fluent English used while working, and English use in the workplace. These proxies are imperfect, but demand-side evidence strongly supports them: according to the OECD, in 2021 English proficiency was an explicit requirement in 22% of online job advertisements in EU member states and the United Kingdom, while roughly half of managerial and professional jobs included such a requirement. The European Commission's JRC report also shows that English proficiency is not only widespread across Europe, but in several countries is positively associated with employability.

In one sentence: According to European and OECD-adjacent labour-market research, strong English proficiency in broader employee samples is typically associated with about 8–15% higher wages, but much larger effects have also been measured in linguistically scarce or highly internationalised segments.

And: The best proxies for “business English” – for example an advanced CEFR level or fluent English regularly used at work – show double-digit wage effects in Germany and Turkey, and in some subgroups rise above 40–50%. These figures, however, should not be generalised to every country and occupation.

What the literature actually measures

The literature reviewed here measures three distinct things. The first is the direct wage premium: a language effect estimated on log hourly or log monthly wages, typically using OLS, IV, GMM, Heckman selection correction, or panel/fixed-effects frameworks. The second is the occupational allocation channel: language proficiency pays off because it leads workers into better positions, so controlling for occupation “eats into” part of the language effect. The third is a proxy result, where the survey does not measure wages directly, but outcomes such as income quintile or employment probability. For our question, the first category is the strongest evidence, the second is an important mechanism, and the third is supplementary.

Studies that directly measure “business English” are rare. The most defensible proxies are therefore advanced English, English use at work, and fluent English for work tasks. These are justified by the OECD's recent job-advertisement database, which shows that English is especially in demand in managerial and professional jobs – precisely the settings where “business English” is conceptually closest to actual workplace use.

It also matters that official European sources – Eurostat/JRC and the OECD – tend to publish demand-side and employment data rather than comparable, pan-European causal wage-premium estimates. The best direct evidence therefore usually comes from peer-reviewed micro studies and IZA/MPRA/NBER-type working papers, while the OECD and JRC are more useful for identifying where and for whom an English premium should be expected.

Empirical results by country and methodology

The strongest European article covering multiple countries is Ginsburgh & Prieto-Rodríguez, which used the ECHP to estimate returns to non-native language proficiency among native workers in nine EU countries. The country-specific, GMM/IV-based returns to English were about: Austria 15%, Denmark 5%, Finland 20%, France 29%, Germany 23%, Greece 15%, Italy 18%, Portugal 31%, and Spain 39%. The authors stress that IV/GMM results are generally larger than OLS results, and that the figures partly reflect the relative scarcity of the language within each country.

In Germany, newer and richly controlled microdata show a more moderate but very stable premium. Using SOEP-IS, Hahm & Gazzola find that English proficiency at any level is associated with about 13% higher hourly wages in their preferred specification; with occupational controls this falls to about 8%. Using IV identification, each additional level on the ordinal English-skill scale causes an average wage increase of about 11% – strong evidence that each step from basic to independent to proficient English has market value. Also in Germany, Stöhr's panel/fixed-effects approach focuses on fluent English used at work and finds a premium of about 10% – one of the best direct proxies for what strong English actually used at work is worth.

In Poland, Liwiński estimates that advanced foreign-language proficiency brings an average wage premium of 11% (high-level English 11%, German 12%, French 22%, Italian 15%, Spanish 32%); the intermediate level is worth about 5% with the full controls. A later working paper reports a 6% premium for workers in Poland and 22% for Poles working abroad – for whom English is the only language that reliably carries a premium.

In Spain, Isphording's IV study finds a particularly large but strongly occupation-dependent English premium: an IV coefficient of 0.383 overall (0.411 for men, 0.474 for women), implying a large double-digit effect. With occupational fixed effects the coefficient falls to about 0.143 and is no longer significant – one of the clearest signs that English is both a productivity skill and an entry ticket into better occupations.

In Turkey, Di Paolo & Tanselfind that a simple “knows English” dummy indicates a monthly earnings premium of about 11%; by skill level, basic English yields only 3–4%, regular English 17–21%, and advanced English 38–47%. In IV interval-regressions, “proficient in English” remains around 44–50%. The premium rises steeply rather than linearly, suggesting the labour market especially prices advanced English suitable for business use. Heterogeneity estimates go further: advanced English used weekly or daily at work shows roughly 40–44%; regular English used monthly about 33%; and among the older 40–65 cohort, advanced English reaches about 62.5%.

A 2025 study (Tóth & Vitáloš) pooling immigrants across European countries models income quintile rather than direct wages, so it is not a direct wage premium. Still, it is an important proxy: higher English levels are associated with a higher income position, with 73–318% higher odds of being in a higher income quintile in the ordered models.

Proxies, demand-side evidence, and business English

For a narrow estimate of “business English”, the direct literature is thin, so the best proxies are advanced/proficient English, fluent English used at work, and English used in the workplace at least monthly or weekly. These hold up for two reasons. First, in the German and Turkish micro studies they show strong double-digit wage effects. Second, OECD job-advertisement data show English is especially demanded in managerial and professional occupations – where language is very likely communication capital actually used at work, not a general “school” competence.

The JRC's Eurostat-based analysis adds that in Europe, English proficiency is not only common but is also linked to employability in several countries. And recent OECD data show that in 2021 English was an explicit requirement in 22% of the job advertisements examined, and appeared in roughly every second managerial or professional position. This does not automatically imply a wage premium of the same size, but it explains why the literature finds stable, positive wage effects in more advanced and internationalised occupations.

Overall, the best currently defensible short estimate for “business English” is: in broad worker samples the wage effect is about 8–13%; for English that is advanced or used at work it is above 10%; and in some countries and subgroups it reaches the 30–50%+ range. This is not a universal parameter, but the best current interval from the intersection of the available studies.

Limitations and robustness

Many studies use self-reported proficiency, which can bias OLS estimates either way. Articles using IV, GMM, selection correction, or rich controls (parental background, cognitive tests, motivation, other skills) are especially valuable; much of the German, Spanish, and Turkish evidence is convincing precisely because it addresses this.
Occupational selection matters: English raises wages partly by steering workers toward better jobs, so adding occupation controls usually lowers the premium. Part of its value works through a job-access channel rather than a within-job channel.
Comparability is limited. Studies use different dependent variables (log hourly wages, log monthly wages, income quintile) and different samples (natives, immigrants, men only), so the figures should not be treated as one “European English-premium parameter”.
Official statistics have a gap too: the JRC and OECD give useful demand-side and employment correlations, but not the country- and level-specific causal wage series. The best numbers still come from micro-level academic studies.

The honest reading: the wage effect is strong, positive, and typically double-digit, but varies substantially by country and labour-market segment. “Up to 50%” reflects the upper end of credible estimates for advanced, work-used English – not a typical result, and not a promise.