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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.

Suggested Citation

  • Azam, Mehtabul & Chin, Aimee & Prakash, Nishith, 2010. "The Returns to English-Language Skills in India," IZA Discussion Papers 4802, Institute for the Study of Labor (IZA).
    • Handle: RePEc:iza:izadps:dp4802
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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. repec:bla:reviec:v:25:y:2017:i:2:p:320-361 is not listed on IDEAS
    3. 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).
    4. 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).
    5. 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.
    6. 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.
    7. 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.
    8. Archana Dang & Pushkar Maitra & Nidhiya Menon, 2017. "Labor Market Engagement and the Health of Working Adults: Evidence from India," Working Papers id:12218, eSocialSciences.
    9. repec:eee:jeeman:v:86:y:2017:i:c:p:262-276 is not listed on IDEAS
    10. P. Geetha Rani, 2014. "Disparities in earnings and education in India," Cogent Economics & Finance, Taylor & Francis Journals, vol. 2(1), pages 1-18, December.
    11. 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.
    12. 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.
    13. 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).
    14. 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.
    15. 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.
    16. Yuki, Kazuhiro, 2018. "Is bilingual education desirable in multilingual countries?," MPRA Paper 85034, University Library of Munich, Germany.
    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. Pauline Dixon, 2013. "International Aid and Private Schools for the Poor," Books, Edward Elgar Publishing, number 15122.
    20. David Clingingsmith, 2014. "Industrialization and Bilingualism in India," Journal of Human Resources, University of Wisconsin Press, vol. 49(1), pages 73-109.
    21. Blom, Andreas & Saeki, Hiroshi, 2011. "Employability and skill set of newly graduated engineers in India," Policy Research Working Paper Series 5640, The World Bank.
    22. 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.
    23. 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

    Keywords

    human capital; English language; India;

    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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