Foreign language skills and labour market earnings in Rwanda

Abstract

ABSTRACT This paper investigates the extent to which proficiency in English and French as a form of human capital individually determine earnings in Rwanda’s labour market and whether it still pays to be bilingual. Using data from the nationally representative Labour Force Survey conducted in 2018, our findings show that after controlling for other human capital and demographic factors, proficiency in both languages is positively rewarded. However, economic returns for proficiency in English language are higher than those for French proficiency and this gap widens from the median to the upper tail of the earnings distribution. Further, in the last two deciles of the earnings distribution, returns to English proficiency surpass returns to bilingual proficiency. A key finding of our study is that proficiency in English is highly rewarded while being bilingual in English and French pays but not in the upper 20% of the earnings distribution. The observed high returns to English language proficiency are likely the outcomes of the language reforms that have been implemented in the country and, most importantly, reflect the history of post-genocide Rwanda. English has become the language of business, government and education, and this trend is likely to continue.