Over‐Education in Multilingual Economies: Evidence from Catalonia

Catalonia’s economy is characterized by linguistic diversity and provides a unique opportunity to measure the incidence of language proficiency on over‐education, that is, whether individuals with deficient language skills, as non‐natives, tend to accept jobs for which they have excessive formal skills. Descriptive evidence suggests the contrary, that individuals with better language knowledge are more likely to be over‐educated. However, estimating a model that controls for individuals’ socio‐demographic characteristics reveals the opposite: better language knowledge decreases over‐education. This effect, although robust to accounting for endogeneity of language knowledge and significant at the individual level, is mostly non‐significant on average.