The Value Of English Proficiency T O The UniTed STaTes
The Value of EnglishProficiency to theUnited States EconomyBy Amber Schwartz and Don Soifer December 2012
Also by the Lexington Institute:English Language Learners and NAEP: Progress Through Inclusion, by Don Soifer, March 2012.California English Learners Raising Achievement from the Bottom, by Don Soifer, July 2010.The Teaching of American History: Promise and Performance, by Robert Holland, December 2009.
WExecutive Summaryhat is the cost to the United States economyattributable to lack of basic English skills? Thenation’s English learner population continues togrow dramatically. According to the 2010 Census,there are currently just over 25 million Englishlearners living in the United States, including morethan 5.3 million learners currently attending elementary and secondary schools.To be certain, English learners are a population accustomed to confrontingchallenges. Dropout rates are just one of the many important educationalindicators where their struggles far surpass other population groups. Theeconomic obstacles are formidable as well: nearly 6 out of 10 English learnersqualify for federal Free or Reduced Lunch programs.1This study specifically examines wage penalties facing the 16.5 million Spanishspeaking English learners, who research indicates are hit hardest due to poorEnglish skills. Using wage penalty projections, data from the 2010 AmericanCommunity Survey, and estimates of high school dropouts attributable toinadequate English skills, it is concluded that 37.7 billion in annual earningsare missed by Spanish speaking English learners each year. This means thatadult, Spanish-speaking English learners lost approximately 3,000 per year inearnings, on average, as a direct result of inadequate English skills.
2The Value of English Proficiency to the United States EconomyBackgroundRapid growth in the number ofEnglish language learners (ELLs)in the United States has continuedover the past decade. Thischanging population dynamichas produced major impacts onschools, not just in border statesor those which have historicallybeen home to large numbersof immigrants, but across thecountry and in communitieswhere schools have littleexperience with English learners.There were 16.5 million limited English proficient Hispanics living in the United Statesin 2010, according to the Census Bureau’s 2010 American Community Survey. Of thisnumber, 3.8 million were in elementary and secondary schools.In fact, the total number of English learners of all language backgrounds enrolled inpublic schools grew from 3.5 million in the 1998-1999 school year to over 5.3 millionstudents in the 2008-2009 school year.2 The Hispanic student population as of 2009was 3.8 million students, or 73 percent of all English learners, and accounted for thelargest share of English learners enrolled in schools.3In considering education strategies for these students, it is essential to recognizethat not all English learners are immigrants. In fact, only one in four English learnersin public schools is foreign born. Nearly 60 percent were born into this country toimmigrant parents, and nearly 20 percent are actually third-generation Americans. Thechallenges facing schools as they strive to serve this population are significant, andrange from typically lower levels of parental involvement to higher mobility rates andless stable home situations.4The success these 3.8 million Spanish-speaking students have learning English willhave direct consequences on not only their future economic and educational success,but on the economic prospects for regions where their growth has been mostprominent. The challenges of educating these children are enormous, since currentlythese students trail the rest of the population both educationally and economically.Statistics show that many Hispanic English learners drop out of high school beforeever mastering English, thus hindering their chances of achieving economic goals laterin life.
Lexington InstituteEnglish Language Learner Population TrendsSuch population shifts have hardly been limited to schools. In fact, more than half ofthe growth in the total population of the United States between 2000 and 2010 wasdue to the increase in the Hispanic population. ELLs accounted for 25 million of theUnited States population over the age of five and Spanish speakers accounted for 66percent of this number. Although most of these (68 percent) have continued to settlein the historic immigration-destination states such as California, Texas, New York, NewJersey, Florida and Illinois, a growing number settled in nontraditional states suchas Massachusetts, Rhode Island, and Connecticut (see Figure 1). These new influxesof non-English residents in non-traditional states pose important challenges andimplications for government agencies, businesses, schools, and communities.The U.S. HispanicPopulationIt is also important to note that whilethe terms “Latino” and “Hispanic” areused broadly as cultural symbols ofidentity, in reality strong differencesexist, linguistically and culturally,between Spanish speakers of differentnational origins.In linguistic terms, these differencesinclude language use accordingto context, individual and content,language varieties, ethnicterminology, and even new dialectsand ways of speaking that occur withspeakers of the same national originliving in different parts of the UnitedStates.5Figure 1States With Large EnglishLearner Populations, 2010StateELL PopulationPercent ShareCaliforniaTexasNew YorkNew JerseyNevadaFloridaHawaiiArizonaIllinoisRhode IslandNew 1.8%9.9%9.6%9.2%9.2%8.8%Connecticut8.7%This is particularly true among theSource: 2010 American Community Survey,three largest subgroups by nationalTable B16001, “Language Spoken at Home byorigin in the United States: MexicanAbility to Speak English for the Population 5Years and Over”Americans, Puerto Ricans and CubanAmericans.6 Members of thesegroups share less in common than thereliance on one term, Hispanics, implies in describing them. The very term “Spanish”as it is used in the United States refers more to a diverse family of languages than to3
4The Value of English Proficiency to the United States EconomySince 1997, the number ofEnglish learner students inpublic schools has increasedby 51 percent.one language. Culturally, and educationally,each of these nationalities conveys on its U.S.populations substantial differences, whichprove challenges to schools serving diversepopulations of Spanish speakers.The census reported that the Hispanic population of the United States grew by 43percent between 2000 and 2010.7 Viewed from a different perspective, in one out ofevery four U.S. counties, the Hispanic population more than doubled in size between2000 and 2010.8But it would be a serious mistake to consider the U.S. Hispanic population ashomogeneous. Certainly, Hispanics of Mexican origin comprise the largest Hispanicsubgroup, totaling 31.8 million in 2010, or 63 percent of U.S. Hispanics. This representsa 54 percent increase since 2000. Hispanics of Puerto Rican decent ranked secondin terms of size, comprising 9 percent. Cuban-Americans were third, making upapproximately 4 percent. Hispanics whose origins were from El Salvador, theDominican Republic and Guatemala made up the remaining subgroups whose U.S.populations numbered at least one million people.9Linguistic Isolation in the United StatesEven more than with individual English learners, the challenges for those inhouseholds defined as linguistically isolated are particularly acute in economic andeducational terms. The Census Bureau defines a linguistically isolated household asone in which all members 14 years of age and older have at least some difficulty withEnglish.There was an increase of one million linguistically isolated households between2000 and 2010 in the United States, with 14.2 million individuals living in 5.3 millionhouseholds.10 As of 2010, linguistically isolated households accounted for 4.6 percentof the total United States population. This was a substantial increase from 2000, whenthe census reported there were 11.9 individuals in 4.4 million linguistically isolatedhouseholds.A handful of states represent the largest majority of the linguistically isolatedpopulation, with California topping the list with linguistic isolated households at 10percent (see Figure 2). Not surprisingly, linguistic isolation tends to be concentrated inmetropolitan areas given the higher number of jobs available in these areas.Living in linguistically isolated areas has been strongly linked to lower earnings fornon-English speakers. Those who live in enclaves that are linguistically isolated
Lexington Institutefrequently have less information about career opportunities in the mainstreameconomy, which generally offer higher wages. Simply stated, where linguistic isolationof speakers of a non-English language is the highest, earnings are lower.11Education and English Language LearnersSince the 1997-1998 school year, the number of English language learner studentsenrolled in public schools has increased by 51 percent.12 They now account forapproximately 5.3 million of the elementary and secondary school populations (seeFigure 3). The staggering rate of growth of this group of students poses uniquechallenges for educators, especially in developing curriculum to match their specificneeds.On the 2011 NationalAssessment ofEducational Progress(NAEP), the test knownas the Nation’s ReportCard, 71 percent of 8thgrade English learnersscored at “belowbasic” in reading, thetest’s lowest levelof achievement.Conversely, Englishspeaking peers scored“below basic” inreading 23 percent ofthe time. This gap hasremained relativelyunscathed since2003. This staggeringdisparity deservesurgent attention fromeducators.English proficiencyis important notonly for the presentand future wages ofEnglish learners andtheir families, but forFigure 2Linguistic Isolation in the United ge 91010.05%New 09%2.69%1.64%1.57%1.56%1.80%4.61%StateIllinoisNew JerseyFloridaNevadaNew MexicoArizonaGeorgiaAlaskaArkansasTennesseeSouth CarolinaLouisianaUnited StatesSource: Household Language by Linguistic Isolation - 2010 AmericanCommunity Survey 1 year estimates - B160025
6The Value of English Proficiency to the United States EconomyFigure 3Number and Percentage of ELLEnrollment Students, by State (2007-2008)StateTotal ELLEnrollmentELL Percentof New YorkIllinoisArizonaNevadaNorth CarolinaUnited 10.70%Source: www.ncela.gwu/edu/statsthe prosperity of the entireUnited States economyas well, and especially forthose regions with thelargest ELL populations. Ithas been an unfortunateand challenging realitythat many English learnersdrop out of school beforeever becoming proficient inEnglish. According to a 2009study, 42 percent of adult,Spanish-speaking ELLsfailed to graduate from highschool, compared to only11 percent of non-Spanishspeaking ELLs.13 In fact,Hispanics have the highestrate of dropout of any majorpopulation group in theUnited States.English Proficiency and Earning PowerLittle research has been done on the effects of English proficiency with regard tocompensation for non-immigrant workers, largely because of the shortage of dataavailable. According to a 2009 report on the literacy skills of adult immigrants andadult English language learners, the employment rates for immigrants are notsignificantly different than those for native-born adults but immigrants are generallypoorer than U.S.-born adults. The extent to which they are poorer is directly relatedto their ethnicity. Thirty-nine percent of non-Spanish speakers had incomes belowthe poverty line, whereas 61 percent of immigrant Spanish speakers were belowthe poverty line.14 These statistics illustrate the importance of creating educationalopportunities designed specifically for Spanish speakers to help provide more longterm employment.Of the 6.3 million Spanish speaking English learner workers, most were likely tobe employed in service occupations (37 percent) or production, craft and repairoccupations (34 percent) followed by operators, fabricators, laborers (10 percent),sales, technical and office (9 percent), farming, fishing and forestry (8 percent) andlastly managerial and professional (2 percent).
Lexington InstituteDeterminingLost Wages Dueto InadequateEnglish SkillsSo given the linkages betweenlanguage skills and economicstatus, to what extent can financialstatus be attributed specifically toEnglish skills?Libertad Gonzalez, an economistat Universitat Pompeu Fabra inBarcelona, who has also donework in the United States onthe faculty at Columbia University, examined the relationship between earnings andEnglish proficiency for Hispanic workers in the United States in a 2005 paper. “Onaverage, LEP [limited English proficiency] imposes an overall wage penalty that liesbetween 3.8 and 38.6 percent, and reduces the probability of finding a job by 0 to 6.5percentage points,” she found.15Using Gonzalez’s wage penalty projections, data from the 2010 American CommunitySurvey, and estimates of high school dropouts attributable to inadequate English skills,it is concluded that 37.7 billion in annual earnings are missed by Spanish speakingEnglish learners each year.The 2010 American Community Survey included data for nearly 6.3 million Hispanicworking individuals, 16 years and older, who knew English “not well” or “not at all.”16Gonzalez’s estimated wage penalties were applied to these groups, with those whoknew English “not at all” receiving a larger wage penalty than those in the “not well”category. A calculation that takes account of these individuals’ occupations yields theresult that every year these Hispanic working adults lose 31.1 billion as a result oflimited English proficiency (see Figure 4).Since the detailed findings of the American Community Survey accounted for only6.3 million of the 16.5 million limited English proficient Hispanics in the workforce,a conservative approach was taken to determinethe wage penalty for the remaining population.The survey included those who were over 16 yearsOnly one in four Englishlearners in public schoolsof age, and defined employment as having heldis foreign born.a job at some point in the last five years, whetherpart-time or full-time. After subtracting the Spanish-7
8The Value of English Proficiency to the United States EconomyFigure 4Wage Penalties Across Occupations, Spanish-speaking English LearnersCategorized as “Not well” and “Not at all” (in thousands of dollars)OccupationGroupMedianIncomeWagePenalty “Notwell”# LEPEmployed“Not Well”MissedEarnings“Not Well”WagePenalty“Not at all”#LEPEmployed“Not at all”MissedEarnings“Not at all”TotalMissedEarningsManagerialand professional 55,8770.29390,073 1,457,1740.44953,857 1,351,807 2,826,982ServiceOccupations 17,1780.1021,577,082 2,765,9280.167731,482 2,099,621 4,865,550Sales, technicaland office 32,5820.148434,522 2,096,7120.215141,135 989,115 3,085,828Production,craft and repair 28,8170.2311,488,544 9,904,5070.362651,103 6,795,875 16,700,382Farming, fishingand forestry 16,032-0.002221,250- 6,7390.131252,707 530,723 523,984Operators,fabricators,laborers 24,6560.137452,158 1,522,8450.307205,445 1,557,092 3,079,9372,035,729TOTALMISSEDEARNINGS 31,082,663Total4,263,629Source: Gonzalez, 2005; American Community Survey 2010speaking English learner student population (since it is assumed they are not yet in theworkforce), 6.5 million Spanish-speaking adult English learners remained that were notaccounted for in the survey.Of these 6.5 million adults, 2.7 million (42 percent) did not complete high school. Itis assumed that 1.6 million (60 percent) of this group did not complete high schoolbecause of limited English skills. Last, Hispanics over the age of 65 accounted for 18percent of the Hispanic population. Thirteen percent was subtracted from the total toaccount for those who were retired. This left an additional 1.4 million Hispanics whowere in the workforce and were non-high school graduates.An Hispanic without a high school diploma earns an average of 24,357 per year andan Hispanic high-school graduate earns an average of 29,100 per year.17 That is anadditional 4,743 per year for having a high school diploma. The total missed earningsper year for Hispanics who did not finish high school is 6.6 billion.Interestingly, the disparity of income for a Hispanic person without a high schooldiploma compared to a Hispanic high-school graduate is lower compared to other
Lexington Instituteethnicities. While Hispanic high-school graduates earn 4,743 more per year over theirlifetimes, African-American high-school graduates earn 5,313 more, and Caucasiangraduates earn an additional 6,034 per year.English Proficiency and High SchoolGraduationThe attainment of a higher levelof education is widely linked byresearchers to better jobs and higherearnings. Unfortunately, 42 percent ofSpanish-speaking ELLs do not completehigh school and only 9 percent haveat least a college degree (see Figure5). English language proficiency is asignificant predictor of dropping outamong Hispanics, especially if Englishproficiency is very low (10th percentile).It is a larger factor if the student is inthe second generation in his/her familyin this country (17 percent chance ofcausing dropout), and highest if he/sheis in the third generation or higher (30percent chance).18 Nearly half of firstgeneration students speak English withdifficulty, compared with 20 percent ofsecond-generation students and 5 percent of the third and higher generations.19High-school dropout rates for Hispanics are extremely high compared to any otherethnic group. A 2008 report by Russell Rumberger and Sun Ah Lim from the Universityof California, Santa Barbara analyzes the reasons why English learners drop out.20One possible reason can be attributed to immigration status, which is an importantdeterminant of English literacy. Foreign-born students have a higher dropout ratethan native-born students. Of Hispanic immigrants, second-generation studentstend to have better English skills thantheir immigrant counterparts. Along withbetter English skills, they often have moreAdult, Spanish-speaking Englishpositivity and motivation than thirdlearners lost approximatelygeneration students. A student’s outside 3,000 per year in earnings as asocial influences, including family, school,direct result of poor English skills.and community, can positively or adverselyaffect his/her educational attainment as well.9
10The Value of English Proficiency to the United States EconomyFigure 5Educational Attainment by Spanish-Speaking StatusEducational attainmentStill in high schoolLess than/some high schoolGED/high school graduateVocational/trade/business schoolSome collegeAssociate’s/2 year degreeCollege degree or ngELLs21125691333Source: Wiley InterScience. Assessing the Literacy Skills of Adult Immigrants andAdult English Language Learners.Conclusion and Policy ImplicationsHispanics in the United States lose an estimated 37.7 billion in earnings each year as aresult of inadequate English skills. It is extremely likely that this estimate underscoresactual figures, due to the conservative assumptions described in this paper.It is also important to note that only Spanish-speaking English learners are consideredin this figure. Census data indicates 73 percent of U.S. English learners are Spanishspeakers, with Chinese (combined), Vietnamese and French/Haiti
English skills. Using wage penalty projections, data from the 2010 American Community Survey, and estimates of high school dropouts attributable to inadequate English skills, it is concluded that 37.7 billion in annual earnings are missed by Spanish speaking English learners each year. This means that adul
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