2010 05 26 VOXEU English skills raise wages for some in India STATS

2010 05 26 VOXEU English skills raise wages for some in India STATS

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English skills raise wages for some, not all, in India Mehtabul Azam Aimee Chin Nishith Prakash 26 May 2010 http://www.voxeu.org/index.php?q=node/5099 Does it pay to speak English? This column presents evidence from India that being fluent in English increases the hourly wages of men by 34% and of women by 22%. But the effects vary. Returns are higher for older and more educated workers and lower for less educated, younger workers, suggesting that English is becoming a complement to education. One in five Indian adults can speak English. Four percent report that they can converse fluently in English, and an additional 16% report that they can converse a little in English according to the 2005 India Human Development Survey. English-speaking ability is higher among men (26% of men speak at least a little English, compared to 14% of women), younger people, more educated people, higher castes, and urban residents. Figure 1 shows mean English ability by states or union territory. The smaller territories tend to have the highest English ability, suggesting that English serves as a working language in a linguistically diverse country where people will often not share a mother tongue. Figure 1. Mean English-speaking skills by territory It is widely believed that there are sizable economic returns to English-language skills in India. Due to
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India’s British colonial past, English remains an official language of the federal government, and is still used in government and education. Moreover, due to the rapid expansion of international trade and outsourcing in recent decades, English has become even more important. Despite this, there are surprisingly no estimates of the wage returns to English skills in India. The impediment appears to have been the lack of a microdata containing measures of both earnings and English ability. In our study (Azam et al. 2010), we quantify the English premium using data from the newly available 2005 India Human Development Survey (IHDS). The Development Survey is a nationally representative dataset covering over 40,000 households located throughout India. Closely related to our study are Rosenzweig (2006) and Chakraborty and Kapur (2008), who estimate the returns to attending a school with English as the medium of instruction but the returns to attending an English medium school is not in general the same as the returns to English-language skills. (Also on the topic of English and Indian economic development are Clingingsmith 2008 and Shastry
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2010 05 26 VOXEU English skills raise wages for some in India STATS

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