How does Language Skills affect salary?

The benefit of learning a language to increase salary is called "bilingual salary premium". The term describes the additional income workers can earn by speaking two or more languages. International companies especially value bilingual employees because they can communicate across markets and cultures, creating new opportunities for their employers.

There are many reasons why employees who speak multiple languages often have an advantage in the job market. In an increasingly globalized world, international companies rely on multilingual employees to communicate effectively across markets and cultures. In 2024, the International Center of Language Studies released a study arguing that 9 out of 10 employers rely on U.S.-based employees who speak languages other than English. The trend is similar in Europe, where multilingual employees can help companies expand into new markets and provide cross-cultural customer support. In this way, language skills can directly support a company's international operations and growth.

The financial benefits of bilingualism have also been documented for years. Studies from 2010 already showed that bilingualism can translate into a higher paycheck, while Forbes reported that 40% of multilingual employees said their additional language skills had helped them find a position. Moreover, they experienced up to a 19% higher paycheck than people who only speak one language. Therefore, bilingualism can not only increase earning potential, but also improve a person's chances of finding a job in the first place.

An Example:

Imagine two candidates applying for a position at a German company expanding into France. Both have similar qualifications, but one also speaks French. This allows them to communicate directly with French clients and business partners, giving the company an additional advantage and making the candidate more valuable to the employer.

In practical terms, these advantages come from the value multilingual employees can bring to their workplace. They can serve a diverse customer base, support international clients, work with teams across borders, and help companies expand into new regions. Because these skills remain relatively uncommon, employers may be willing to hire and pay more for bilingual candidates. As global operations become more common, employees who can communicate across languages can therefore play an important role in supporting business goals while benefiting themselves financially.

Key takeaways

• English pays: +13% wage premium in Germany
• English is in demand: Required in 22% of EU jobs
• Other languages pay, too: Spanish shows a 32% premium in Poland
• Proficiency matters: Advanced skills bring higher returns

Depending on location and context, the language a person speaks can influence their earning potential. Statistics suggest that some languages are more valuable in the European labor market than others. According to a study by the OECD, English ranks sixth among the core skills employers seek and is required in 22% of jobs across the European Union. In Germany, one of Europe's major export economies, speaking English is associated with an average wage premium of 13%, according to Labor Economics.

However, the demand for English varies considerably between occupations. While around one in two vacancies for managers and professionals required English, this fell to roughly one in ten vacancies in skilled agricultural, forestry, fishery, and elementary occupations.^[4] This suggests that language skills are particularly valuable in knowledge-intensive and internationally connected sectors. A 2015 study similarly highlights tourism, trade, services, and multinational business as industries where language skills are especially important because employees regularly interact with international markets.^[5] Overall, English remains the dominant language in the European labor market, with demand particularly strong in higher-skilled occupations and internationally oriented regions.

Other languages can also provide significant wage advantages. In a study of approximately 35,000 workers in Poland, University of Warsaw researcher Jacek Liwiński found wage premiums of 32% for Spanish, 22% for French, 15% for Italian, and 12% for German.^[6] His findings also suggest that less commonly spoken languages can command higher premiums when employers struggle to find qualified speakers. Moreover, advanced language skills generate larger premiums than intermediate skills, indicating that strong proficiency can be more valuable than basic knowledge alone.

Key takeaways

• Language skills are widely needed: 9 in 10 U.S. employers rely on them.
• Demand is growing: 56% expect demand to increase.
• Spanish & Chinese lead demand: They are among the most sought-after languages.
• Demand ≠ salary: German ranks highest for average earnings.

Similar to Europe, the United States relies heavily on foreign-language skills, and demand for these skills is expected to grow. Findings from an ACTFL report suggest that demand for languages beyond English will continue to increase. More specifically, 9 out of 10 U.S. employers rely on employees with language skills other than English, while 56% expect this demand to increase over the next five years. The most in-demand languages in the United States are Spanish, Chinese, French, Arabic, and Korean, with particularly strong demand for Spanish and Chinese. This demand is reflected across multiple studies.

However, the languages most in demand are not necessarily the most profitable. German has been identified as one of the highest-paying languages in the United States, with speakers earning an average salary of approximately $109,000 per year.^[7] Portuguese ranked second at around $64,507, followed by Japanese at approximately $58,840.^[7] Location also plays an important role in determining the financial value of a language. Portuguese was the highest-paying language in New York, while German ranked highest in Chicago, Boston, and San Francisco.^[7]

This distinction between demand and earning potential is important. Spanish and Chinese create a large number of job opportunities because they are widely used across industries such as healthcare, education, customer service, and international business. Meanwhile, languages such as German, Portuguese, and Japanese may command higher average salaries because they are more closely associated with specialized and higher-paying sectors, including engineering, finance, technology, and global trade. The financial value of a language therefore depends not only on how widely it is spoken, but also on the industries, locations, and roles in which it is needed.

Key takeaways

• English remains dominant: 1.5 billion speakers.
• Five languages will lead: Mandarin, Spanish, English, Hindi & Arabic.
• Mandarin is rising: Driven by China's economic influence.
• Context matters: Demand and scarcity determine language value.

Looking beyond the current labor market, emerging language trends could also influence the future value of language skills. As of last year, English remained the most spoken language worldwide, with approximately 1.5 billion speakers.^[8] However, the Engco Forecasting Model predicts that Mandarin, Spanish, English, Hindi, and Arabic will be the five most widely spoken languages in the future. These developments are particularly relevant from an economic perspective, as the growth of a language can reflect the economic influence of the countries and regions where it is spoken.

Mandarin, for example, is estimated to have approximately 1.168 billion speakers worldwide. Its large and growing speaker base suggests that Mandarin will continue to play an important role in global labor markets, particularly as China remains a major force in international trade, manufacturing, and investment. While Mandarin could eventually overtake English in terms of total speakers, the British Council does not consider English to be in immediate danger of losing its global position. Instead, it is likely to face increasing competition from other major languages. At the same time, the number of people speaking English as a second language is expected to continue growing.

Overall, these findings suggest that the financial value of a language depends on both what language is spoken and where it is used. Widely spoken languages can increase the number of available job opportunities, while less common languages can provide additional value when qualified speakers are difficult to find. When a specific language is in high demand within a particular industry or location, it can create opportunities for both employment and higher salaries.

Key Takeaways:

1. Don't choose a language only because it pays well.
2. Consider where and how the language is used.
3. Strong proficiency is more valuable than simply knowing the language.

For professionals looking to maximize their earning potential, the best language to learn is often the one that aligns with their career path and local job market. Rather than focusing solely on the "highest-paying" language, it is more useful to consider where a particular language can provide a competitive advantage.

The value of a language can also change as economies, industries, and labor markets evolve. A language that is highly rewarded today may become less valuable as demand shifts between regions and sectors. For this reason, language learning should be viewed as a long-term investment, considering not only current salary data but also future demand, industry trends, and transferable skills.

For students and professionals planning to work abroad, learning the local language can create advantages both in the workplace and in everyday life. Ultimately, language skills are most valuable when they connect people to opportunities that others cannot easily access, making multilingualism a valuable long-term investment in both career and personal development.

1. If you want your language skills to be seen on a CV, it is helpful to create a dedicated "language" section on your resume.
2. Yale University provides a useful list of terms that can be used to describe your language proficiency according to your level of fluency.
3. One of the most helpful tips is to align your language skills with the skills the company is currently searching for in their position. If specific language skills are a priority of the company, it is best to put those skills on top of the resume.
4. State your proficiency as clearly as possible and, if available, add official documents that prove your language degree.

Looking for a way to increase your language skills? At Sprachcaffe, we offer a wide range of language classes, both in-person and online. Sign up to improve your language today!

• [1] The Stepstone Group
• [2] University of Guelpha
• [3] WIFO
• [4] OECD
• [5] EURES
• [6] Springer Nature
• [7] INVERSE
• [8] VISUAL CAPITALIST