English language premium: Evidence from a policy experiment in India

• Estimate English skill premium in the labor market.
• Evaluation of a language policy that led to an exogenous change in English learning opportunity.
• Our results indicate that a 10% lower probability of learning English in primary schools leads to a decline in weekly wages by 8%.
• Individuals exposed to the English abolition policy are less likely to work in high ranking jobs.

In this paper, we estimate the English premium in a globalizing economy, by exploiting an exogenous language policy intervention in India that abolished teaching of English in public primary schools. Our results indicate that a 10% lower probability of learning English in primary schools leads to a decline in weekly wages by 8%. On an average, this implies 26% lower wages for cohorts exposed to the policy change. We find supporting evidence that occupational choice played an important role in determining this wage-gap.