Abstract: Empirical evidences from economics of language manifest that language skill, as a crucial form of human capital, will bring economic return to labor force. The majority of related researched have paid attention to migrants in developing countries, whereas scant studies have based their context on labor force in developing countries. It is of great practical implication to delve into wage return to English proficiency of employees in China, a large developing country under the monolingual policy. Yet due to time-lag of data, empirical results of domestic literature on this topic may fail to reflect the latest condition sufficiently. Based on latest, first-hand from China Employer-Employee Survey (CEES) in 2015, this paper controls the observable and unobservable factors at a firm level, by using multiple methods to measure to measure the effect of English human capital on hourly wage of employees. With OLS, IV and PSM, it empirically identifies the significantly positive causal effect of English comprehensive ability, English listening and speaking and English reading is 14.6%-18.6%, 20.5%-27.9% and 25.9%-35.8%, higher than hourly wage of those without such abilities. It is proposed to increase investment in vocational training of business English, balance English for General Purpose and English for Special Purpose in reform of English education and encourage institutes of higher education to develop ESP which pays more attention to instrumental application of English language.
Keywords: English Proficiency; Employees’ Wage; Propensity Score Matching; English education