Wage Returns to English Skills: A Comparison of Local and Multinational Banks in Thailand

Abstract

This study examines the wage returns to English-language skill for workers in banks in Bangkok, Thailand. It is the first attempt to estimate the wage returns to English skill in Thailand, or in the Southeast Asia region in general. It adds to a small number of studies on the relationship between English language skill and wages in countries where English is not used as a primary language. The study uses an original data set collected through surveys with 428 respondents between August 2014 and May 2015. It uses an original and detailed rubric to let respondents self-assess their English skill. Using simple OLS, the study finds that there are positive wage returns to intermediate English skill of up to 23%, but only for workers with 10 years of work experience or fewer. For workers with more than 10 years of experience, there is not a clear relationship between English skill and wages. Considering the younger cohort of workers, the study then examines the differential returns to English skills for workers in local and multinational banks. The results indicate that workers in local banks clearly earn wage premiums for English language skills of up to 19% for intermediate-level English skill. Workers in multinational banks have on average better English skills and higher salaries than workers at local banks, but there is no clear relationship between English skills and salary for this group of workers.