IDEAS home Printed from https://ideas.repec.org/a/eee/chieco/v43y2017icp91-104.html
   My bibliography  Save this article

The economic returns to proficiency in English in China

Author

Listed:
  • Wang, Haining
  • Smyth, Russell
  • Cheng, Zhiming

Abstract

We examine economic returns to proficiency in English in China using two waves of the China Labor-Force Dynamics Survey (CLDS). We find positive earnings returns to proficiency in English. We find considerable heterogeneity in the economic returns to proficiency in English across age groups, coastal and inland provinces, levels of education and occupation. We find that the returns to proficiency in English are higher in the coastal region, higher for women and evidence of education-language and skill-language complementarity. We also see differences in the economic returns to English between urban and rural residents and between rural-urban migrants and urban locals. Our findings help to explain why the demand for learning English is so high in China, as well as having implications for the Chinese government at a time when it is re-evaluating the importance attached to learning English in the curriculum.

Suggested Citation

  • Wang, Haining & Smyth, Russell & Cheng, Zhiming, 2017. "The economic returns to proficiency in English in China," China Economic Review, Elsevier, vol. 43(C), pages 91-104.
    • Handle: RePEc:eee:chieco:v:43:y:2017:i:c:p:91-104
    DOI: 10.1016/j.chieco.2017.01.004
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S1043951X17300044
    Download Restriction: Full text for ScienceDirect subscribers only

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Wang, Haining & Cheng, Zhiming & Smyth, Russell, 2016. "Language and consumption," China Economic Review, Elsevier, vol. 40(C), pages 135-151.
    2. Christian Dustmann & Arthur van Soest, 2001. "Language Fluency And Earnings: Estimation With Misclassified Language Indicators," The Review of Economics and Statistics, MIT Press, vol. 83(4), pages 663-674, November.
    3. 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.
    4. Antonio Di Paolo & Aysit Tansel, 2015. "Returns to Foreign Language Skills in a Developing Country: The Case of Turkey," Journal of Development Studies, Taylor & Francis Journals, vol. 51(4), pages 407-421, April.
    5. James Levinsohn, 2007. "Globalization and the Returns to Speaking English in South Africa," NBER Chapters, in: Globalization and Poverty, pages 629-646, National Bureau of Economic Research, Inc.
    6. Michael A. Shields & Stephen Wheatley Price, 2002. "The English language fluency and occupational success of ethnic minority immigrant men living in English metropolitan areas," Journal of Population Economics, Springer;European Society for Population Economics, vol. 15(1), pages 137-160.
    7. Paul W. Miller & Barry R. Chiswick, 2002. "Immigrant earnings: Language skills, linguistic concentrations and the business cycle," Journal of Population Economics, Springer;European Society for Population Economics, vol. 15(1), pages 31-57.
    8. Fersterer, Josef & Winter-Ebmer, Rudolf, 2003. "Smoking, discount rates, and returns to education," Economics of Education Review, Elsevier, vol. 22(6), pages 561-566, December.
    9. Stöhr, Tobias, 2015. "The returns to occupational foreign language use: Evidence from Germany," Labour Economics, Elsevier, vol. 32(C), pages 86-98.
    10. Donald R. Williams, 2011. "Multiple language usage and earnings in Western Europe," International Journal of Manpower, Emerald Group Publishing, vol. 32(4), pages 372-393, July.
    11. Matt Dickson, 2013. "The Causal Effect of Education on Wages Revisited," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 75(4), pages 477-498, August.
    12. Clark, Tom S. & Linzer, Drew A., 2015. "Should I Use Fixed or Random Effects?," Political Science Research and Methods, Cambridge University Press, vol. 3(02), pages 399-408, May.
    13. Chiswick, Barry R & Miller, Paul W, 1995. "The Endogeneity between Language and Earnings: International Analyses," Journal of Labor Economics, University of Chicago Press, vol. 13(2), pages 246-288, April.
    14. Mehtabul Azam & Aimee Chin & Nishith Prakash, 2013. "The Returns to English-Language Skills in India," Economic Development and Cultural Change, University of Chicago Press, vol. 61(2), pages 335-367.
    15. Alan Duncan & Astghik Mavisakalyan, 2015. "Russian language skills and employment in the Former Soviet Union," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 23(3), pages 625-656, July.
    16. Ott Toomet, 2011. "Learn English, Not the Local Language! Ethnic Russians in the Baltic States," American Economic Review, American Economic Association, vol. 101(3), pages 526-531, May.
    17. Barry Chiswick & Paul Miller, 2010. "Occupational language requirements and the value of English in the US labor market," Journal of Population Economics, Springer;European Society for Population Economics, vol. 23(1), pages 353-372, January.
    18. Ingo E. Isphording, 2013. "Returns to Foreign Language Skills of Immigrants in Spain," LABOUR, CEIS, vol. 27(4), pages 443-461, December.
    19. Casey, Gregory P. & Owen, Ann L., 2014. "Inequality and Fractionalization," World Development, Elsevier, vol. 56(C), pages 32-50.
    20. Chiswick, Barry R. & Miller, Paul W., 2003. "The complementarity of language and other human capital: immigrant earnings in Canada," Economics of Education Review, Elsevier, vol. 22(5), pages 469-480, October.
    21. Gao, Wenshu & Smyth, Russell, 2011. "Economic returns to speaking 'standard Mandarin' among migrants in China's urban labour market," Economics of Education Review, Elsevier, vol. 30(2), pages 342-352, April.
    22. Christian Dustmann & Francesca Fabbri, 2003. "Language proficiency and labour market performance of immigrants in the UK," Economic Journal, Royal Economic Society, vol. 113(489), pages 695-717, July.
    23. Brune, Lasse F., 2007. "The smoker's wage penalty puzzle: evidence from Britain," ISER Working Paper Series 2007-31, Institute for Social and Economic Research.
    24. 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.
    25. repec:zbw:rwirep:0398 is not listed on IDEAS
    26. Richard Fry & B. Lindsay Lowell, 2003. "The Value of Bilingualism in the U.S. Labor Market," ILR Review, Cornell University, ILR School, vol. 57(1), pages 128-140, October.
    27. 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.
    28. Victor R. Fuchs, 1982. "Time Preference and Health: An Exploratory Study," NBER Chapters, in: Economic Aspects of Health, pages 93-120, National Bureau of Economic Research, Inc.
    29. Paul Clarke & Claire Crawford & Fiona Steele & Anna Vignoles, 2015. "Revisiting fixed- and random-effects models: some considerations for policy-relevant education research," Education Economics, Taylor & Francis Journals, vol. 23(3), pages 259-277, June.
    30. Isphording, Ingo, 2013. "Returns to Local and Foreign Language Skills – Causal Evidence from Spain," Ruhr Economic Papers 398, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    31. Haining Wang & Zhiming Cheng & Russell Smyth, 2016. "Language, Health Outcomes and Health Inequality," Monash Economics Working Papers 43-16, Monash University, Department of Economics.
    32. G. Reza Arabsheibani & Altay Mussurov, 2007. "Returns to schooling in Kazakhstan," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 15(2), pages 341-364, April.
    33. Victor A. Ginsburgh & Juan Prieto-Rodriguez, 2011. "Returns to Foreign Languages of Native Workers in the European Union," ILR Review, Cornell University, ILR School, vol. 64(3), pages 599-618, April.
    34. McManus, Walter & Gould, William & Welch, Finis, 1983. "Earnings of Hispanic Men: The Role of English Language Proficiency," Journal of Labor Economics, University of Chicago Press, vol. 1(2), pages 101-130, April.
    35. Ziggy MacDonald & Stephen Pudney, 2000. "The Wages of Sin? Illegal Drug Use and the Labour Market," LABOUR, CEIS, vol. 14(4), pages 657-673, December.
    36. Casale, Daniela & Posel, Dorrit, 2011. "English language proficiency and earnings in a developing country: The case of South Africa," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 40(4), pages 385-393, August.
    37. Chiswick, Barry R. & Wang, Zhiling, 2016. "Social Contacts, Dutch Language Proficiency and Immigrant Economic Performance in the Netherlands: A Longitudinal Study," IZA Discussion Papers 9760, Institute of Labor Economics (IZA).
    38. Guo, Qian & Sun, Wenkai, 2014. "Economic returns to English proficiency for college graduates in mainland China," China Economic Review, Elsevier, vol. 30(C), pages 290-300.
    39. Melitz, Jacques, 2008. "Language and foreign trade," European Economic Review, Elsevier, vol. 52(4), pages 667-699, May.
    40. Mora, Marie T & Davila, Alberto, 1998. "Gender, Earnings, and the English Skill Acquisition of Hispanic Workers in the United States," Economic Inquiry, Western Economic Association International, vol. 36(4), pages 631-644, October.
    41. Christian Dustmann & Arthur Van Soest, 2002. "Language and the Earnings of Immigrants," ILR Review, Cornell University, ILR School, vol. 55(3), pages 473-492, April.
    42. Simon M. Burgess & Carol Propper, 1998. "Early health-related behaviours and their impact on later life chances: evidence from the US," Health Economics, John Wiley & Sons, Ltd., vol. 7(5), pages 381-399.
    43. Kaivan Munshi & Mark Rosenzweig, 2006. "Traditional Institutions Meet the Modern World: Caste, Gender, and Schooling Choice in a Globalizing Economy," American Economic Review, American Economic Association, vol. 96(4), pages 1225-1252, September.
    44. Morton Stelcner & Daniel M. Shapiro, 1997. "Language and Earnings in Quebec: Trends over Twenty Years, 1970-1990," Canadian Public Policy, University of Toronto Press, vol. 23(2), pages 115-140, June.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Antonio Paolo & Aysit Tansel, 2019. "English skills, labour market status and earnings of Turkish women," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 46(4), pages 669-690, November.
    2. Yang, Mian & Yang, Fuxia & Sun, Chuanwang, 2018. "Factor market distortion correction, resource reallocation and potential productivity gains: An empirical study on China's heavy industry sector," Energy Economics, Elsevier, vol. 69(C), pages 270-279.
    3. Song, Yang, 2018. "Intended and unintended effects of student performance measurement reform in China," China Economic Review, Elsevier, vol. 50(C), pages 133-152.
    4. Cheng, Zhiming & Wang, Ben Zhe & Taksa, Lucy, 2017. "Labour Force Participation and Employment of Humanitarian Migrants: Evidence from the Building a New Life in Australia Longitudinal Data," GLO Discussion Paper Series 106, Global Labor Organization (GLO).
    5. Antonio Di Paolo & Aysit Tansel, 2019. "“English skills, labour market status and earnings of Turkish women”," AQR Working Papers 201901, University of Barcelona, Regional Quantitative Analysis Group, revised Jan 2019.
    6. Mauro Mediavilla & María-Jesús Mancebón & José-María Gómez-Sancho & Luis Pires Jiménez, 2019. "Bilingual education and school choice: a case study of public secondary schools in the Spanish region of Madrid," Working Papers 2019/01, Institut d'Economia de Barcelona (IEB).
    7. Wang, Haining & Cheng, Zhiming & Smyth, Russell, 2019. "Health outcomes, health inequality and Mandarin proficiency in urban China," China Economic Review, Elsevier, vol. 56(C), pages 1-1.
    8. Dovì, Max-Sebastian, 2019. "Does higher language proficiency decrease the probability of unemployment? Evidence from China," China Economic Review, Elsevier, vol. 54(C), pages 1-11.

    More about this item

    Keywords

    China; English proficiency; Education; Wage; Human capital;

    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • I26 - Health, Education, and Welfare - - Education - - - Returns to Education

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:chieco:v:43:y:2017:i:c:p:91-104. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Dana Niculescu). General contact details of provider: http://www.elsevier.com/locate/chieco .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.