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The Returns to English-Language Skills in India

Author

Listed:
  • 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.

Suggested Citation

  • 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.
  • Handle: RePEc:ucp:ecdecc:doi:10.1086/668277
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    Cited by:

    1. 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.
    2. Archana Dang & Pushkar Maitra & Nidhiya Menon, 2017. "Labor Market Engagement and the Health of Working Adults: Evidence from India," Working Papers id:12218, eSocialSciences.
    3. repec:eee:jeeman:v:86:y:2017:i:c:p:262-276 is not listed on IDEAS
    4. Donado, Alejandro, 2014. "Foreign Languages and their Impact on Income and Unemployment," Annual Conference 2014 (Hamburg): Evidence-based Economic Policy 100288, Verein für Socialpolitik / German Economic Association.
    5. 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," Wittener Diskussionspapiere zu alten und neuen Fragen der Wirtschaftswissenschaft 14/2011, Witten/Herdecke University, Faculty of Management and Economics.
    6. Dang, Archana & Maitra, Pushkar & Menon, Nidhiya, 2017. "Labor Market Engagement and the Health of Working Adults: Evidence from India," IZA Discussion Papers 11118, Institute for the Study of Labor (IZA).
    7. Singh, Abhijeet, 2015. "Private school effects in urban and rural India: Panel estimates at primary and secondary school ages," Journal of Development Economics, Elsevier, vol. 113(C), pages 16-32.
    8. Pauline Dixon, 2013. "International Aid and Private Schools for the Poor," Books, Edward Elgar Publishing, number 15122, April.
    9. David Clingingsmith, 2014. "Industrialization and Bilingualism in India," Journal of Human Resources, University of Wisconsin Press, vol. 49(1), pages 73-109.
    10. 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.
    11. Jain, Tarun & Maitra, Pushkar & Mani, Subha, 2016. "Barriers to Skill Acquisition: Evidence from English Training in India," IZA Discussion Papers 10199, Institute for the Study of Labor (IZA).
    12. 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).
    13. Gauri Kartini Shastry, 2012. "Human Capital Response to Globalization: Education and Information Technology in India," Journal of Human Resources, University of Wisconsin Press, vol. 47(2), pages 287-330.
    14. Rosangela Bando & Xia Li, 2014. "The Effect of In-Service Teacher Training on Student Learning of English as a Second Language," IDB Publications (Working Papers) 6596, Inter-American Development Bank.
    15. Rosangela Bando & Xia Li, 2014. "The Effect of In-Service Teacher Training on Student Learning of English as a Second Language," IDB Publications (Working Papers) 86173, Inter-American Development Bank.
    16. Chakraborty, Tanika & Bakshi, Shilpi Kapur, 2016. "English language premium: Evidence from a policy experiment in India," Economics of Education Review, Elsevier, vol. 50(C), pages 1-16.
    17. 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.
    18. Parshad, Rana D. & Bhowmick, Suman & Chand, Vineeta & Kumari, Nitu & Sinha, Neha, 2016. "What is India speaking? Exploring the “Hinglish” invasion," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 449(C), pages 375-389.
    19. Blom, Andreas & Saeki, Hiroshi, 2011. "Employability and skill set of newly graduated engineers in India," Policy Research Working Paper Series 5640, The World Bank.
    20. 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.

    More about this item

    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration

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