Economic returns to English proficiency for college graduates in mainland China

•English proficiency had significant effects on college graduates' starting salaries.•It improved college graduates' chances of changing hukou status from rural to urban.•It enhanced their future earning potential.•Paths: better chances of working in foreign companies and of landing job interviews•It did not crowd out other important human capital investments.

The present study examines the economic returns to English proficiency for college graduates in Mainland China, paths through which English proficiency may affect earnings, and possible moderation effects and crowding-out effects of English proficiency on other human capital. The analysis results indicate that English proficiency had significant effects on college graduates' starting salaries, their probability of changing permanent residence status from rural to urban, and their future earning potential. Possible reasons for the economic returns to English proficiency include increased chances of working in the employment sector where the average income was higher than in the other sectors and improved opportunities of landing job interviews. English proficiency may mitigate the effects of GPA rankings on salaries. Meanwhile, it did not seem to have been achieved at the expense of other important human capital investments. The results have policy implications as well as contributing to the literature.