The Economics of Language
The English Wage Premium in India
How speaking English fluently is linked to higher wages in India, what research found about the size of the premium, and why it shapes parents' school choices.
In India, English fluency is linked to higher wages.
Research
A widely cited study by Mehtabul Azam, Aimee Chin and Nishith Prakash using 2005 survey data found that men fluent in English earned about 34% more than those who spoke none, with smaller gains for a little English.
Why
- English is used in corporate jobs, IT, higher education and courts.
- It connects workers to global markets.
Inequality
- Fluency is more common among urban, richer and higher-caste families.
- So the premium can widen inequality.
Parents’ choices
Many families pay for English-medium schools hoping for this premium.
Caveats
Part of the premium reflects other advantages, like better schooling and networks, that go along with English.
Two graduates with similar marks apply for a customer-facing job; the one who speaks fluent English gets a higher offer.
Some of it reflects family background and schooling.
- English fluency is linked to higher wages in India.
- One study found about a 34% premium for fluent men.
- Fluency is unequally spread.
- The premium drives English-medium school demand.
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