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The Returns to English-Language Skills in India

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  • Mehtabul Azam
  • Aimee Chin
  • Nishith Prakash

Abstract

India's colonial legacy and linguistic diversity give English an important role in its economy, and this role has expanded due to globalization in recent decades. In this study, we use individual-level data from the 2005 India Human Development Survey to quantify the effects of English-language skills on wages. After controlling for age, social group, schooling, geography, and proxies for ability, we find that hourly wages are on average 34% higher for men who speak fluent English and 13% higher for men who speak a little English relative to men who do not speak English. The return to fluent English is as large as the return to completing secondary school and half as large as the return to completing a bachelor's degree. In addition, we find that more experienced and more educated workers receive higher returns to English. The complementarity between English skills and education appears to have strengthened over time--only the more educated among young workers receive a premium for English-speaking ability, whereas older workers across all education groups do.

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Bibliographic Info

Article provided by University of Chicago Press in its journal Economic Development and Cultural Change.

Volume (Year): 61 (2013)
Issue (Month): 2 ()
Pages: 335 - 367

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Handle: RePEc:ucp:ecdecc:doi:10.1086/668277

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  1. Angrist, Joshua & Chin, Aimee & Godoy, Ricardo, 2008. "Is Spanish-only schooling responsible for the Puerto Rican language gap?," Journal of Development Economics, Elsevier, vol. 85(1-2), pages 105-128, February.
  2. Kaivan Munshi & Mark Rosenzweig, 2009. "Why is Mobility in India so Low? Social Insurance, Inequality, and Growth," NBER Working Papers 14850, National Bureau of Economic Research, Inc.
  3. Hoyt Bleakley & Aimee Chin, 2004. "Language Skills and Earnings: Evidence from Childhood Immigrants," The Review of Economics and Statistics, MIT Press, vol. 86(2), pages 481-496, May.
  4. Lang Kevin & Siniver Erez, 2009. "The Return to English in a Non-English Speaking Country: Russian Immigrants and Native Israelis in Israel," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 9(1), pages 1-30, November.
  5. Robert T. Jensen, 2010. "Economic Opportunities and Gender Differences in Human Capital: Experimental Evidence for India," NBER Working Papers 16021, National Bureau of Economic Research, Inc.
  6. Albert Saiz & Elena Zoido, 2005. "Listening to What the World Says: Bilingualism and Earnings in the United States," The Review of Economics and Statistics, MIT Press, vol. 87(3), pages 523-538, August.
  7. Emily Oster & M. Bryce Millett, 2010. "Do Call Centers Promote School Enrollment? Evidence from India," NBER Working Papers 15922, National Bureau of Economic Research, Inc.
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Cited by:
  1. Priya Ranjan & Nishith Prakash, 2012. "Education Policies and Practices: What Have We Learnt and the Road Ahead for Bihar," Working papers 2012-19, University of Connecticut, Department of Economics.
  2. Karthik Muralidharan & Venkatesh Sundararaman, 2013. "The Aggregate Effect of School Choice: Evidence from a Two-stage Experiment in India," NBER Working Papers 19441, National Bureau of Economic Research, Inc.
  3. Blom, Andreas & Saeki, Hiroshi, 2011. "Employability and skill set of newly graduated engineers in India," Policy Research Working Paper Series 5640, The World Bank.
  4. Di Paolo, Antonio & Tansel, Aysit, 2013. "Returns to Foreign Language Skills in a Developing Country: The Case of Turkey," IZA Discussion Papers 7724, Institute for the Study of Labor (IZA).
  5. World Bank & National Research University – Higher School of Economics, 2013. "Developing Skills for Innovative Growth in the Russian Federation," World Bank Other Operational Studies 16100, The World Bank.
  6. Seele, Peter, 2011. ""If your letter was in German, I would not understand a bit, and would have ignored that": Preliminary findings from a survey of highly skilled migrants from India and China with working/edu," Discussion Papers 14/2011, Witten/Herdecke University, Faculty of Management and Economics.

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