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The Returns to English-Language Skills in India

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  • Azam, Mehtabul

    ()
    (Oklahoma State University)

  • Chin, Aimee

    ()
    (University of Houston)

  • Prakash, Nishith

    ()
    (University of Connecticut)

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. It is widely believed that there are sizable economic returns to English-language skills in India, but the extent of these returns is unknown due to lack of a microdata set containing measures of both earnings and English ability. In this paper, we use a newly available data set – the India Human Development Survey, 2005 – to quantify the effects of English-speaking ability on wages. We find that being fluent in English (compared to not speaking any English) increases hourly wages of men by 34%, which is as much as the return to completing secondary school and half as much as the return to completing a Bachelor’s degree. Being able to speak a little English significantly increases male hourly wages 13%. There is considerable heterogeneity in returns to English. 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 earn a premium for English skill, whereas older workers across all education groups do.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 4802.

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Length: 35 pages
Date of creation: Mar 2010
Date of revision:
Publication status: published in: Economic Development and Cultural Change, 2013, 61 (2), 335-367
Handle: RePEc:iza:izadps:dp4802

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Keywords: human capital; English language; India;

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References

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  1. Kevin Lang & Erez Siniver, 2006. "The Return To English In A Non-English Speaking Country: Russian Immigrants And Native Israelis In Israel," Boston University - Department of Economics - The Institute for Economic Development Working Papers Series, Boston University - Department of Economics dp-159, Boston University - Department of Economics.
  2. Joshua Angrist & Aimee Chin & Ricardo Godoy, 2006. "Is Spanish-Only Schooling Responsible for the Puerto Rican Language Gap?," NBER Working Papers 12005, National Bureau of Economic Research, Inc.
  3. 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.
  4. 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.
  5. 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.
  6. 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.
  7. 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.
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Cited by:
  1. 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).
  2. Blom, Andreas & Saeki, Hiroshi, 2011. "Employability and skill set of newly graduated engineers in India," Policy Research Working Paper Series 5640, The World Bank.
  3. Ranjan, Priya & Prakash, Nishith, 2012. "Education Policies and Practices: What Have We Learnt and the Road Ahead for Bihar," IZA Discussion Papers 6614, Institute for the Study of Labor (IZA).
  4. 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.
  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. 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.
  7. Rosangela Bando & Xia Li, 2014. "The Effect of In-Service Teacher Training on Student Learning of English as a Second Language," IDB Publications 86173, Inter-American Development Bank.

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