Returns to English-language skills in India

Another interesting paper in the most recent number of Economic Development and Cultural Change looks at the returns to English-language skills in India:

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 paper, we use individual-level data from the India Human Development Survey, 2005 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. Additionally, 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.

Download the draft.
Did you see "The economics of language"?