The Economic aspects of English Language Skills: A Study of Its colonial legacy in the linguistic diversity of India.

Dr Sudhansu  kumar Dash

1. Introduction

 India is a linguistically diverse country. it has thousands of languages, of which 122 have over 10,000 native speakers according to the 2001 Census. English is only 44th on the list of languages in India with the most native speakers, belying its important role in India since the arrival of the British East India Company in the 1600s. India was formally ruled by the British Empire from 1757-1947 i.e.by the British East India Company from 1757-1857,and by the British Crown from 1858-1947. During this time, English became the language of power and prestige. It was associated with the ruling British, the law was in English, and government administration, at least at the higher levels, was conducted in English. Additionally, it became the medium of instruction in public schools. After India gained independence from the British in 1947, debate ensued over the role of the colonial language in the country. There were calls to replace English with a native Indian. Under British rule, India established a system of public education; before, there were few schools and only the elite received schooling. It was decided after much debate that English would be the medium of instruction in this new system of public school language as the official language of India to reinforce national identity. Hindi, which is by far the most dominant mother tongue in India was politically infeasible to make the sole official language of India as it was thought to be disadvantageous to states where Hindi was not prevalent. Thus, the Constitution of India names both Hindi and English as the official languages of India. Individual states legislate their own official languages, but communication among states and in the federal government would take place in Hindi or English. From an individual's perspective, there are several economic incentives to learn English. On the one hand, English has value as a lingua franca. Knowledge of a common language facilitates communication. A common language is especially useful in linguistically diverse places, where the chances of meeting someone with the same native language are relatively low. A common language is also useful for international trade. While English is not the only possible lingua franca, it is a natural one given India's colonial past and given the influence of the United States in the world economy. On the other hand, the use of English is firmly entrenched in government and schools due to the colonial past. To be a government official or teacher one needs to be proficient in English. These occupations are considered attractive in India because they are white-collar jobs providing secure employment and good benefits. In contrast, most jobs in the India are on household farms or in casual labor, which tend to provide uncertain means of livelihood and involve strenuous physical labor.

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. It is widely believed that there are sizable economic returns to English-language skills in India, but the extent of these returns is unknown due to lack of a micro data set containing measures of both earnings and English ability. It would be useful not only to have more recent figures, but also to examine English ability along various dimensions such as education, age and sexual major challenge to estimating the returns to English is the likely endogeneity of language skills in the earnings equation. The study attempts to explain just not  the returns to English-language skills causally without an experiment but   a valid instrumental variable for English skills. It is difficult to convincingly overcome these remaining identification issues. However, the researcher believes that even if the estimated returns to English do not have a causal interpretation, they are still useful. On the one hand, very little information exists on the relationship between English skill and earnings in developing countries, so even if our estimates were purely descriptive they would still add to knowledge. On the other hand, English skills are not the only type of human capital that individuals and policymakers can invest in, and a comparison of the returns to English to returns to other types of human capital (such as schooling or job training) is revealing about the relative value of English even if the estimated returns do not have a causal interpretation. This is because estimating returns to these other types of human capital faces the same identification issues as estimating the returns to English, so comparisons of the returns might still be meaningful. English-language skills are a form of human capital. Individuals, or parents acting on their behalf, weigh the marginal costs and marginal benefits of investing in English-language skills. There could be both monetary and non-monetary costs associated with acquiring English-language skills. Non-monetary costs include the effort to learn English, which is not the native language of 99.8% of the Indian population. They might also include weakened ties to one's tradition social network because. Extra monetary costs are incurred to the extent that parents enroll their child in private schools, hire tutors, or invest in more years of schooling than they otherwise would in order to help the child learn English.

2.Review of Literature

Munshi and Rosenzweig (2006) and Chakraborty and Kapur (2008) estimate the returns to attending a school using English as the medium of instruction. We are aware of two previous studies on the relationship between English-language skills and earnings in India: Munshiand Rosenzweig (2006) and Chakraborty and Kapur (2008), where the latter is an unpublished manuscript. Both estimate the returns to attending a school with English (as opposed to some native language) as the medium of instruction. Munshi and Rosenzweig collected their own data on Maharashtrians living in Dadar, whichis located in Mumbai, Maharashtra, India. Using data on parents' income histories andthe language of instruction in their secondary school (Marathi or English), they estimate significant positive returns to an English-medium education. Attending an English-medium school increased both women's and men's income by about 25% in 2000. Chakraborty andKapur use National Sample Survey data to estimate the impact of a 1983 policy in West Bengal which eliminated English as the medium of instruction in primary schools. They found that switching from English to Bengali medium of instruction significantly reduced wages. Simple comparisons of cohorts attending primary school before and after the policy change suggest that English-medium schooling raised wages about 15% in the 2000s. Angrist and Lavy (1997), found  French-language skills significantly. These returns are described in greater detail in Munshi and Rosenzweig (2003). However, Angrist, Chin and Godoy (2008) found that in Puerto Rico, switching the medium of instruction from English to Spanish in PuertoRico had no impact on the English-speaking proficiency of Puerto Ricans; thus, it is not a foregone conclusion that instruction in a foreign language will lead to greater proficiency in that foreign language. In fact, the premise of He, Linden and MacLeod (2008) is that Indian primary schools are ineffective at teaching English. Munshiand Rosenzweig's findings come from one community in Mumbai, and Chakraborty andKapur's findings come from a policy change in one state, West Bengal. There is a large literature on the effects of language skills on wages using data from other countries. However, most of these studies estimate the returns to the host-country language for immigrants to that host country, such as the returns to English for U.S. immigrants. Bleakley and Chin (2004) provide a brief overview of these studies. Fewer studies estimate the return to a language that is not the country's dominant language. Two studies that estimate the effect of a colonial language are Angrist and Lavy (1997), who estimate the return to French-language skills in Morocco, and Levinsohn (2007), who estimates the returns to speaking English in South Africa. Two that estimate the effect of foreign languages that do not have a colonial past in the country are Saiz and Zoido (2005) and Lang and Siniver(2006). Saiz and Zoido estimate the returns to Spanish, French and other foreign languages between English-language skills and earnings. In order to recover the returns to English-language skills, one needs to know the firstrst-stage effect of English-medium schooling on English-language skills. In practice, there might be complications since English-medium schooling might impact earnings through mechanisms other than English-language skills. Roy (2004) found that the West Bengal policy that changed the medium of instruction from English to Bengali increased educational attainment.10They perform a randomized evaluation of a new methodology for teaching English in primary schools. At the outset of the experiment, they found that only 10% of second and third graders could identify the picture of the correct object when given the objects English name even though these

words were part of the official English curriculum.9among U.S. college graduates. Lang and Siniver estimate the returns to English proficiency in Israel, a country where English is neither a dominant nor official language. The latter two studies suggest that proficiency in an international language such as English is rewarded more in the labor market than proficiency in some other foreign language. This study makes several contributions to the existing literature. It is the first to estimate the returns to English-language skills in India. A major hurdle in the past has been the availability of a data set measuring both language skills and earnings of individuals. The recent availability of data from the India Human Development Survey, 2005 helps us clear this hurdle. Additionally, it adds to the small handful of studies that estimates the effect of proficiency in a foreign language that has colonial roots or serves as an international language. Finally, it adds to the few studies on the topic using data from a developing country. In order to learn English well, one might have to attend different schools or study the native language less relative to other members of the network (Munshi and Rosenzweig 2006). Munshi and Rosenzweig (2006) and Chakraborty and Kapur (2008)estimate the returns to English-medium schooling which is not the same as the returns to English-language skills. Proficient labor force in a particular region attract _rms to locate there. Shastry (2010)_nds that districts with a lower cost of acquiring English (and therefore, where English wasmore prevalent) had greater growth in information technology jobs. A causal story in thereverse direction is that higher returns for a particular skill (e.g., English pro_ciency) moti-vates individuals to invest more to develop that skill. Clingingsmith (2007) finds that Indiandistricts with more factory employment experience greater growth in bilingualism. Selection on unobserved variables is unlikely to account for much of our estimated returns to English (Altonji, Elder and Taber2005)).

3. Objectives of the study

1. To study the economic aspects of English language skill.

2. To study the colonial legacy of English language in India

3. To study the linguistic diversity in India..

4. To study the local labor market conditions can be correlated with both language skills and earnings.

5. To study the bias in estimation of the effect of English-language skills even after controlling for more detailed variables than is typically available in household surveys. 

6. To study the unobserved ability that could still be a confounding factor to include variables adequately.

7. To study the biases due to measurement error and reverse.

4. Methodology

 This research uses a qualitative approach to investigation. Survey research method is followed for conducting the study. Secondary data is collected from India Human Development Survey (IHDS) .The study uses a large, nationally representative data set, which enables us to explore potential heterogeneity in returns to English-language skills along various dimensions by sex, age, education, social group and geographic variables.

4.1. Sources of Data

The study takes the advantage of a recently available nationally representative individual-level data set, the India Human Development Survey (IHDS), 2005, to provide the estimates of the returns to English-language skills in India. A secondary contribution of this paper is to provide new descriptive information about the prevalence of English ability in India. We use data from the 2005 India Human Development Survey, a nationally representative household data set collected by the National Council of Applied Economic Research in New Delhi Most relevant for the study  is the information about each household member's ability to converse in English is collected. The study is  not aware of any other large-scale individual-level data set in India that contains a measure of English-language skills. Since the outcome of interest is earnings, we restrict our sample to individuals aged 21 to 65. The main analysis will use individuals who report working for a wage or salary .

4.2. Population of the study

 In a sample of 110,185 people aged 21-65, 38% participated in wage employment. This raises concerns sample selection bias. This problem could be serious in the context of India, where over 80% of the population is rural, and family farms and non-farm businesses continue to absorb much of the labor force. To address this, the study will use two alternative measures of earnings that are observed regardless of an individual's employment status: household income and household consumption. The study also presents the descriptive statistics for various subsamples .The survey covered all the states and union territories of India except Andaman and Nicobar and, two union territories which together account for less than .05% of India's population. The  data analysis uses the IHDS design weights  to obtain nationally representative statistics. The census does collect information on language knowledge of the population, however these data are reported only in aggregate form. Additionally, the census does not collect data on wages, income or consumption, wage employment, male household heads in wage employment, all male household heads, and women in wage employment. It  discusses the dependent variables in greater detail . The specific measure of wages that the study uses is hourly wage for primary job.

5. Analysis

 Based on the 1991 Census, 11% of the Indian population reported some English ability. Though only 0.2% of the Indian population reported English as their mother tongue in the 2001 Census, considerably more know it as a second or third language. According to the 1991 Census, 11% of the Indian population reports English as a second or third. In 2001, 40% of the population named Hindi as their mother tongue; the next language with most native speakers, It is widely believed that English knowledge has grown since 1991, but there has-been no data to substantiate these claims until now, with the release of the India Human Development Survey (IHDS), 2005 reports the mean English ability among individuals aged 21-65 in the IHDS along various dimensions. One in five Indians report having the ability to speak English, comprised of 4% who can converse fluently in English and 16% who can converse a little in English. English ability is higher among men approximately 26% of men report having the ability to speak English compared to 14% of women and this is probably largely due to differences in educational attainment. English ability is higher among younger people 29% of people aged 21-35 speak English compared to 16% for people aged 50-65. These differences may be due to differences in educational attainment, greater incentives to learn English due to globalization in recent decades, or depreciation of English skills with time since leaving school. The ability to speak English increases dramatically with educational attainment in India. Almost 82% of individuals who have at least a Bachelor's degree can speak English as compared to 52% for those who have completed secondary schooling , 12% for those who have completed 5-9 years, and virtually nil for  those who have less schooling. The positive relationship between English ability and educational attainment is not surprising since English is not the native language of 95.8% of the Indian population, and thus the main exposure to English for children would be in schools. In India, many public schools follow the “Three Language Formula" recommended by the central government, which generally leads to teaching in English by middle school. According to the 1986 All-India Education Survey, which is a census of schools, 1.3% of schools with grades 1-5 used English as the medium of instruction, and 15% reported teaching English as  second language. In schools with grades 6-8, these figures rise to 3.6% .This calls for the teaching in the mother tongue or regional language during primary school. After primary school, introduce a second language English or some other modern Indian language. After middle school, introduce a third language. In secondary schools (covering grades 9 and 10), 9.2% use English as the medium of instruction, and 68% teach English as a first or second language. In higher secondary schools, colleges and universities, English is often used though it should be pointed out that it is possible to graduate from secondary school and college without being proficient in English; except in the science and engineering fields, many courses are offered in Hindi or the state language, and exams may be written in English, Hindi or the state language. The study examines percent speaking English by social group. In India, the two most disadvantaged social groups are the schedule tribes (STs) and scheduled castes (SCs). The Other Backward Classes (OBCs) are above the SCs in ritual standing, but are also much worse of than the high castes. English ability is greater among members of higher castes than members of lower castes or the scheduled tribes. This is likely related to the lower educational attainment among members of disadvantaged social groups, and in the case of the scheduled tribes, of their geographic isolation. There is considerable geographic variation in the prevalence of English in India. It is beyond the scope of this research to account for all these cross-state differences. However study attempts to describe English ability along several geographic dimensions. There is a large difference in English ability by urban status: 39% of individuals living in urban areas report to have ability to speak English as compared to only 12% living in rural areas.  Individuals living in districts with greater historical prevalence of English skill are more likely to speak English today: 29% of individuals living in districts with above-median share of the 1961population speak English, compared to 14% of those living in other districts. Additionally, English-speaking ability is more widespread in districts that had greater linguistic diversity in 1961, or that had an information technology. STs are distinguished by their tribal culture and physical isolation. SCs are groups with low social and ritual standing. Omitted variables bias will likely be a concern for several reasons. One omitted variable that would be important is years of schooling. Early grades are more likely to take place in the native language, with the regional or national language used as the medium of language in later grades. This generates a positive relationship between English proficiency and years of schooling. Some of the estimated effects of English proficiency is in fact due to schooling. The second important omitted variable  is geographic characteristics. Places where English is more prevalent are different from places where English is less prevalent. English is more prevalent in major cities, but these are also places where wages are on average higher. There could be a causal relationship between wages and English-language skills, or a correlation could exist through some third factor. Moreover, it is of interest to explore heterogeneity in returns to English, which can be done because of our large, diverse sample.

In India, students must pass a standardized exam developed by the board of education under whose jurisdiction their school falls in order to receive a certificate. It makes one eligible for further schooling, and a better exam performance enables one to attend better schools. This exam is typically taken at the end of10th grade. Performance on the  exam even if measured in only a few categories seems like a credible proxy for ability in the Indian context, and is akin to controlling for aptitude test scores to address the ability bias when estimating the returns to schooling in the U.S. context. As a proxy for ability among the less educated, the researcher uses the response to the question of whether the individual has failed or repeated a grade. The study finds that although the proxies for ability are significant predictors of wages, nevertheless their inclusion does not change.  Reverse causality could be a source of bias. Being in a higher-paying job might cause workers to develop better English-language-skills, such as through being able to afford English lessons or getting more exposure to English in the workplace. If so, then the estimated coefficient for English skills would exceed the true returns to English because it encapsulates the reverse effect too. For these reasons, our empirical strategy may not yield estimates of the returns to English that have a causal interpretation.

6. Findings

The main findings of the study are as follows. First, English-language skills are strongly positively associated with earnings. After controlling for age, social group, schooling, geography and proxies for ability and geography,  find that hourly wages are on average 32% higher for men who speak fluent English and 17% higher for men who speak a little English relative to men who speak no English. These estimates are not only statistically significant, they are also economically significant.  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. Second, there is considerable heterogeneity in the returns to English. More experienced and more educated workers receive higher returns to English. The complementarily between English skills and education appears to have strengthened over time only the more educated among young workers earn a premium for English skill, whereas older workers across all education groups do.

The finding shows that, compared to men who have no English ability, men who are fluent in English have 34% higher hourly wages, and men who speak a little English have 13% higher hourly wages. These results21In rupee terms, hourly wages are 10, 23 and 42 for men with no, little and uent English.It is comforting that the estimated coefficients for English skill do not change much with the addition of these variables, and suggests that the estimated coefficients for the language variables is really due to language rather than remaining omitted variables. Had ability bias been important, then the inclusion of the proxies for ability should have changed the estimated coefficients for English skill more dramatically.

In particular, we may be concerned that English proficiency affects both participation in wage employment and wages. Consistent with these empirical observations  where there are language-skill complementarities, English skill enables workers to enter more lucrative career tracks, i.e., these are jobs that have better promotion (or career progress) and raise opportunities. During his tenure, an older vintage worker would have acquired significant work experience. Although a younger worker possesses the English skills that would have been necessary to obtain the entry-level position decades ago, he lacks the work experience, making him unable to substitute for the older vintage worker today. Thus, while English skill may well be especially valuable in linguistically diverse places, these places tend to have more English speakers .The researcher looks at heterogeneity in returns by IT presence, which is  measured  as a dummy variable indicating whether the individual's district had any IT firm headquarters or branch according to the 2003 National Association of Software and Service Companies directory. Though districts with an IT firm have more widespread English, they have significantly lower estimated returns to fluent English . The IT interaction effects decrease in magnitude with the addition of interactions of English skill with the other geographic variables and age.

 As the study is interested in quantifying the returns to English for women too, selective participation in wage employment is a more serious problem for women. Only 22%of women work in a wage-and-salary job, compared to 54% of men. Participation in wage employment is more sensitive to English ability for women than men. The study finds  that women who are fluent in English are 17 percentage points more likely to be in wage employment relative to women with no English ability, and women who speak a little English are 4 percentage points more likely. While the analysis for men suggests that sample selection bias is minimal, this result may not necessarily carry over to women. The results for female wage earners on the basis of   age, social group, schooling, urban dummy, district fixed effects and proxies for ability, the study finds that women who are fluent in English earn 22% more relative to women with no English ability, and women who speak a little English earn 10% more.

7. Recommendations

This study is of interest for several reasons. Foremost, knowing the returns to English would help individuals and policymakers in India make decisions about how much to invest in English skills. Language skills are costly to acquire, and it is difficult to make optimal choices without knowledge about the expected benefits of English-language skills. Additionally, this study informs on the more general question of the value of English in a context where English is not a prevalent language. English is often used as a lingua franca, the language of communication among two people who do not share a common native language and many countries, even ones that are not former British or American colonies, invest in English skills. One mechanism through which English skill might affect wages is through occupational choice. Due to India's colonial past, many jobs in government and education require English. Also, due to the way science, engineering and other technical fields are typically taught in universities (in English) and due to the growth of international trade and outsourcing, many modern, technical jobs also require English to enter. But these jobs which include government officials, teachers, engineers, physicians, and managers tend to be attractive relative to other jobs in the economy. Thus, it is of interest to ask how much of the estimated returns to English is accounted for by occupational choice alone.

8. Conclusion

In India, the raw difference in earnings between people who speak English and people who do not is large, but this overstates the economic value of English because higher ability people are more likely to be proficient in English. In this study,  advantage of a rich data is taken set-to mitigate this ability bias. After controlling for age, social group, schooling, geography and proxies for ability, and is found  that there are large, statistically significant returns to English-language skills in India. In India and many other developing countries, there is active debate over whether to promote the local language or a more globally accepted language like English in schools. While promoting the local language might make primary schooling more accessible and strengthen national identity, it may reduce economic opportunities because of the special role of English in the global economy.

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