Human Capital Response to Globalization: Education and Information Technology in India

Gauri Shastry

Journal of Human Resources, 2012, vol. 47, issue 2

Abstract: Recent studies suggest that globalization increases inequality, by increasing skilled wage premiums in developing countries. This effect may be mitigated, however, if human capital responds to global opportunities. I study how the impact of globalization varies across Indian districts with different costs of learning English. Linguistic diversity in India compels individuals to learn English or Hindi. Some districts have lower relative costs of learning English due to linguistic predispositions. I demonstrate that these districts benefited more from globalization: They experienced greater growth in information technology and school enrollment. Consistent with this response, they experienced smaller increases in skilled wage premiums.

Date: 2012
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