Second language skills and labor market outcomes: Evidence from the handover of Hong Kong

Yonghong Zhou, Rong Zhu, Xian Zheng

Research output: Contribution to journalArticlepeer-review

2 Citations (Scopus)

Abstract

This paper analyzes the effects of second languages skills on labor market outcomes in Hong Kong. Using data from the Hong Kong Population Censuses, we find that both Mandarin and English language skills are linked to improved labor market performance, and the premiums for English are much larger than those for Mandarin. We further show that the sovereignty transfer of Hong Kong from the UK to China in 1997 has strengthened the positive role of Mandarin and English language skills in finding a job in Hong Kong. The political change has also increased the earnings of people with the ability to speak Mandarin. As a comparison, the earnings premium for speaking English has declined in magnitude after the sovereignty transfer. Investigating into the mechanisms, we show that the rising premiums for Mandarin language skills are operated through choices of occupations and industry sectors. Our findings suggest that important political changes can affect the economic returns to language skills in the labor market.

Original languageEnglish
Article number101366
Number of pages16
JournalCHINA ECONOMIC REVIEW
Volume59
Early online date2 Nov 2019
DOIs
Publication statusPublished - Feb 2020

Keywords

  • Labor market returns
  • Language skills
  • Sovereignty transfer

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