Occupational language exclusion means that specific language skills are a prerequisite for occupations with high pays. This thesis exposes the phenomenon of occupational language exclusion and examines the relations between English proficiency and earnings in Hong Kong, where both Chinese and English are official languages. Using data from the Hong Kong Panel Study of Social Dynamics (HKPSSD), I find that Hongkongers with higher English proficiency earn more than those with lower English proficiency. Occupational language exclusion, measured in terms of the percentage of individuals with English skills in each occupation, explains the positive relationship between English proficiency and earnings. Decomposition results show that between-occupation differentials represent the maj...[ Read more ]

Occupational language exclusion means that specific language skills are a prerequisite for occupations with high pays. This thesis exposes the phenomenon of occupational language exclusion and examines the relations between English proficiency and earnings in Hong Kong, where both Chinese and English are official languages. Using data from the Hong Kong Panel Study of Social Dynamics (HKPSSD), I find that Hongkongers with higher English proficiency earn more than those with lower English proficiency. Occupational language exclusion, measured in terms of the percentage of individuals with English skills in each occupation, explains the positive relationship between English proficiency and earnings. Decomposition results show that between-occupation differentials represent the major earnings differentials between Hongkongers with and without English skills. Furthermore, the gender pay gap narrows as people’s English proficiency increases. Occupational language exclusion provides a new perspective to understand relations between language proficiency and earnings.