[lg policy] In India, it pays � literally � to speak English

Harold Schiffman hfsclpp at GMAIL.COM
Mon Aug 23 14:57:17 UTC 2010

In India, it pays � literally � to speak English
Published: Saturday, Aug 21, 2010, 1:14 IST
By Venkatesan Vembu | Place: Hong Kong | Agency: DNA

Language chauvinism is rampant in Indian political circles — be it
Hindi, Marathi or Tamil — and some politicians have even called for a
ban on the use of English on the ground that it is “elitist”. However,
a path-breaking research study by a team of developmental economists
has established that English-language proficiency among Indian workers
leads to higher hourly wage earnings.

The research conducted by Dr Nishith Prakash, post-doctoral research
associate at the Charles H Dyson School of Applied Economics and
Management at Cornell University and research fellow at the Institute
for the Study of Labour in Bonn; Dr Mehtabul Azam at the World Bank;
and Dr Aimee Chin at the University of Houston, quantifies for the
first time in an Indian context, the returns to English-language

The findings have implications for language policy in a linguistically
diverse country like India, says Dr Prakash. In an interview to DNA,
he points out that knowing the returns to English would help
individuals and policy makers make decisions about how much to invest
in English skills. Excerpts:

Is English-language proficiency a passport to higher earnings?
Our study established that English-language proficiency leads to
higher earnings. Men who speak fluent English earn, on average, 34%
higher hourly wages than those who speak no English; even workers who
speak a little English earn 13% higher hourly wages.

A second, somewhat surprising, finding from our study was that the
younger cohort does not receive a wage premium if their English
language proficiency is not complemented by good education. It implies
that it doesn’t help younger people to enrol in crash courses on
English learning of the sort offered in Indian cities for exorbitant
fees. It’s more rewarding for them to enrol in schools where they
might acquire proficiency in English alongside a wholesome education.

Why are these findings significant?
A big part of labour economics is‘returns to education’, that is, the
understanding that the more educated you are, the higher your earning
potential is (subject, of course, to other factors, such as demand and
supply). We added an additional layer, language proficiency, and
estimated the rewards from that in the Indian context. And for the
first time, we’ve established clearly that there are significant
returns for workers who speak fluent English — and we’ve quantified
it. This has implications for language policy in a linguistically
diverse country like India.

Knowing the returns to English would help individuals and policy
makers make decisions about how much to invest in English skills.
Language skills are costly to acquire, and it’s difficult to make
optimal choices without knowing the expected benefits.

How do you reconcile your findings with the fact that English isn’t
the dominant language in India?
It’s true, according to the 2001 Census, that English is only 44th on
the list of languages in India with most native speakers. Only 0.2% of
the Indian population reported English as their mother tongue, but
considerably more know it as a second or third language. In urban
locations, about 35% speak English with some level of proficiency;
among the 18-35 age group, about 25% speak English. Among graduates
with more than 15 years of schooling, more than 88% speak English.
That’s a pretty big number.

Since English-language proficiency reflects higher educational
attainment, could it be said that higher earnings came from better
education and not just from English-language proficiency?
That’s a valid question: this aspect of any scientific research is
called the identification strategy. In this study, we encounter the
problem of ‘omitted variable bias’. Without going into technical
details, I’d say we’ve accounted for every factor that could weaken
the argument we make. For example, years of schooling, location, how
well you performed in the 10th standard, family background, and so on.
And the estimates of the wage premium for
English-proficient workers are at the lower bound: that is, this is
the minimum wage premium they might enjoy.

Do women enjoy a wage premium if they’re proficient in English?
The estimates in respect of women are imprecise, with a higher margin
of error. However, what we’ve seen is that women who have English
ability enjoy 22% higher wages than women who don’t; the premium is
less than for men. In urban areas, the wage premium that
English-proficient women enjoy is pretty large; this may be accounted
for by density of employers and the fact that given the
demand-and-supply equation, women with certain skills, being fewer in
number, can enjoy a wage premium. Inversely, women in rural areas
don’t benefit, perhaps because they are still less mobile, dependent,
or have household responsibilities.

And how are the returns to English-language skills for the various
social categories in India?
The returns to English proficiency are significantly lower for the
scheduled castes relative to the ‘upper castes’ but no different for
scheduled tribes and other backward classes. However, the estimates in
respect of scheduled tribes are imprecise given the low sample size.
The findings may perhaps be explained by the larger story of social
discrimination, whereby they don’t get the same returns despite their
having skills. But we probably need to explore this theme in greater

What policy implications does your study have, considering language
policy is an intensely political issue?
If the medium of instruction in primary schools is the mother tongue,
there’s a case to be made that schooling will be more accessible to
children. There are also claims that this has a correlation to
national identity — although, in my view, that is to be established.
Yet, there’s a trade-off that policy makers must make: schooling in
one’s mother tongue reduces economic opportunity than if the medium of
instruction had been English.

But, enrolling for crash courses in English speaking isn’t helpful.
English classes from the school upwards are better. Of course, quality
of schooling is also important, but I’m not aware of a
nationally representative survey on quality of schooling in India.

Should policy makers provide subsidies for English language learning?
A few other scholars have looked at the arena of private tuitions and
rewards therefrom. Perhaps in primary education or even in secondary
education, subsidies that advance English proficiency would be great.
People do spend a lot of money on acquiring such skills.


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