The returns to language ability in Hong Kong: before and after the handover

Abstract

This article examines the economic returns to language ability of natives and Chinese immigrants in Hong Kong. Upon learning that the People's Republic of China would resume the exercise of sovereignty over Hong Kong in 1997, local residents flocked to learn Putonghua. Until now, the general belief was that Putonghua would gain importance in the labour market and the ability to speak Putonghua would substantially raise their productivity and earnings. The empirical results in this article prove ironically otherwise. Speaking Putonghua has little very impact on native and immigrant workers’ earnings.