The Signaling Value of Foreign Language Proficiency: A Mediation Analysis of Labor Market Outcomes in Shenzhen
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Yunjun Kong, Nan Xu
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Drawing on the economics of language, which conceptualizes language skills as a form of human capital, this study investigates the mechanisms through which foreign language proficiency (FLP) translates into labor market advantages in China’s most globalized metropolis. While prior research has confirmed a positive correlation between FLP and earnings, the underlying pathways remain underexplored. Using survey data from 286 white-collar workers in Shenzhen, this study moves beyond bivariate correlation to test whether work-related foreign language use frequency mediates the FLP–income and FLP–promotion relationships. Results from path analysis reveal a theoretically intriguing pattern: for monthly income, the indirect effect via work-related usage is negligible (4.4% of total effect) and non-significant (Sobel z = 0.79, p > 0.05); for promotion, although partial mediation is observed (29.5% of total effect), the direct effect remains dominant. These findings challenge the intuitive “instrumental” assumption that FLP generates returns primarily through daily application, and instead foreground the signaling function of high-level language competence—employers reward FLP not merely as a tool for operational tasks, but as a credible signal of broader, hard-to-measure qualities such as cognitive agility, cultural adaptability, and future learning potential. This study contributes to language economics by disentangling two competing pathways, with implications for individual human capital investment, corporate talent management, and urban language policy.
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Authors
Yunjun Kong, Nan Xu
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References:
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