Language Skills and Income: Evidence from Xizang’s Rural Households in China

Language competence, particularly in the national standard language ability (NSLA), constitutes a critical dimension of human capital. According to classical human capital theory and endogenous growth models, proficiency in NSLA enhances individuals’ capacity for information acquisition, social communication, and labor market integration, thereby improving employment outcomes and income levels. Drawing on data from the 2021 wave of the Annual Livelihood Survey of Farmers and Herders in Xizang in China, this study investigates the relationship between NSLA and household income among Tibetan farmers and herdsmen. Using an extended Mincerian earnings function, we find that: (1) NSLA has a statistically significant positive effect on household income; (2) among the four dimensions of language competence—listening, speaking, reading, and writing—speaking ability exerts the greatest impact; and (3) the income effect of NSLA varies considerably across income groups, with limited returns for low-income households and diminishing marginal returns for high-income households. These findings suggest that promoting NSLA among the rural Tibetan labor force can enhance income generation capacity and contribute to reducing income inequality. The study offers policy implications for advancing inclusive development and linguistic equity in multilingual, service-oriented economies like Xizang in China.