The Returns to English-Language Skills in India

35 Pages Posted: 15 Mar 2010

See all articles by Mehtabul Azam

Mehtabul Azam

Oklahoma State University - Stillwater; IZA Institute of Labor Economics

Aimee Chin

University of Houston - Department of Economics

Nishith Prakash

University of Connecticut; Institute for the Study of Labor

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.

Keywords: English language, human capital, India

JEL Classification: J31, J24, O15

Suggested Citation

Azam, Mehtabul and Chin, Aimee Y. and Prakash, Nishith, The Returns to English-Language Skills in India. IZA Discussion Paper No. 4802, Available at SSRN: https://ssrn.com/abstract=1570400

Mehtabul Azam (Contact Author)

Oklahoma State University - Stillwater ( email )

Stillwater, OK 74078-0555
United States

IZA Institute of Labor Economics ( email )

P.O. Box 7240
Bonn, D-53072
Germany

Aimee Y. Chin

University of Houston - Department of Economics ( email )

Houston, TX 77204-5882
United States

Nishith Prakash

University of Connecticut ( email )

365 Fairfield Way, U-1063
Storrs, CT 06269-1063
United States

HOME PAGE: http://https://sites.google.com/site/nishithprakash1978/

Institute for the Study of Labor ( email )

P.O. Box 7240
Bonn, D-53072
Germany

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