There is a widely held belief that there are sizeable economic returns to English-language skills in India.
One in five Indian adults can speak English. Four per cent report that they can converse fluently in English, and an additional 16% report that they can converse a little in English (India Human Development Survey (IHDS) 2005).1 English-speaking ability is higher among men - 26% of men speak at least a little English, compared to 14% of women. Same is true for those belonging to so called higher castes, urban residents, and younger and better educated population. Almost 89% of individuals who have at least a Bachelor's degree can speak English as compared to only 11% for those who have completed 5-9 years of schooling, and virtually nil for those who have less than four years of schooling. The reason could be that many public schools in India follow the “Three Language Formula"2 recommended by the central government, which generally leads to teaching of English language in middle school.
Due to the country’s British
colonial past, English remains an official language of the federal government
and medium of instruction in educational institutions run by it. Therefore, to
be a government official or teacher (other than at low levels), one needs to be
proficient in English. These occupations are considered attractive in India
because they are white-collar jobs that provide secure employment and good
benefits. Moreover, due to the rapid expansion of international trade and
outsourcing in the post-liberalisation era, possessing English language skills
has become even more lucrative.
These results are consistent with
the idea that education and English skills have become more complementary over
time. For example, at the entry level, workers with English skill may have been
able to find a good job because there are new jobs that require both higher
education as well as English skill to perform such as many jobs in information
technology (IT).
To the extent that jobs rewarding
English tend to be located in cities where higher levels of government,
multinational firms, or IT firms tend to be located. However, urban areas also
tend to have a larger supply of English-proficient workers because urban
schools produce more English speakers.
Quantifying the returns to English-language skills in India is of interest for several reasons. First and foremost, a deeper understanding of the returns to learning English will help individuals and policymakers in India make decisions about how much to invest in English skills as learning English leads to economic prosperity given the role of English in the global economy. Hence, many Indians are willing to spend extra money on schools and tutors to gain English proficiency.
We find that there are large,
significant returns to English-language skills in India. The growth in the
Indian economy, along with incredible advances in the services sector and
growing middle-class, has created demand for new skills and job profiles. While,
a diploma or a degree can provide employment, it is the worker’s skills that
lead to his/ her enhanced productivity and ability to reap advantages of new
economic opportunities. Within this context, promotion of an education policy
with a focus on acquiring English language skills becomes imperative.
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