English as economic value: facts and fallacies

This paper offers an overview of the economic approach to the question of the ‘value’ of English. In the first section, I discuss the reasons why this question is attracting increasing attention, showing that it reflects an increase in the objective frequency of contact between speakers of different languages, as well as a concern for the role of English in those contacts. Section 2 presents five important analytical distinctions which help to structure the investigation: they address the direction of causality considered; the ‘regulated’ or ‘unregulated’ nature of the context being examined; the difference between market and non‐market effects; the micro‐ as opposed to the macro‐economic level; and the contrast between, on the one hand, the issue of (more or less efficient) allocation of resources between uses and, on the other hand, the issue of the (more or less equitable) distribution of resources among actors. Section 3 turns to the labour market value of English language skills in Switzerland, presenting first some methodological aspects and then providing some fundamental statistical results. Switzerland currently is the only country in which English is neither a majority nor an official language for which the data necessary for such estimations are available. These results indicate that, for Switzerland taken as a whole, English language skills can be associated with remarkably high and statistically robust wage premia which, in the models estimated here, range from 12% to 30%. Section 4 discusses the implications of these results with respect to long‐term trends and policy orientations; the tentative prediction made is that the labour market value of English, relative to other skills, will erode in the long run, as a result of the dynamics of the labour market. This paper combines concepts from sociolinguistics on the one hand, and quantitative economics on the other hand. The presentation is kept non‐technical throughout, in order to make it accessible to practitioners of both disciplines.