Does higher language proficiency decrease the probability of unemployment? Evidence from China

This paper considers how proficiency in Standard Mandarin, China's official language, affects employment probabilities in China. Previously, research has focused on language proficiency' effects on earnings, with little research having been done on how proficiency affects employment probabilities vis-a-vis unemployment. Data will be taken from the China Labor-force Dynamics Survey (CLDS), which makes it possible to distinguish between employed and unemployed people. Using a linear probability model, it is estimated that a one-standard-deviation increase in Mandarin proficiency decreases unemployment probabilities by 5%. Significant heterogeneity is also found. The 'employment premium' for language proficiency is highest for younger people and people living in urban areas. The effects on employment is not significant for older people, and people living in rural areas.