IDEAS home Printed from https://ideas.repec.org/a/eee/jrpoli/v70y2021ics0301420717304154.html
   My bibliography  Save this article

The impact of mining taxes on public education: Evidence for mining municipalities in Chile

Author

Listed:
  • Oyarzo, Mauricio
  • Paredes, Dusan

Abstract

Chilean mining municipalities collect a mineral tax to compensate for the negative externalities associated with resource extraction. Although this implies a positive marginal impact on local finance, there is not enough empirical evidence to support that this improves the quality of life in these communities. This article attempts to bridge this knowledge gap via a unique experimental framework, specifically, the Chilean tax system and a mining law that allows certain municipalities above an exogenous threshold to keep the extra income. We use Regression Discontinuity Design to identify the causal effect on public education indicators and our results are robust and show that in the margin that the educational performance of mining municipalities is worse than that of the counterfactuals. In addition, the evidence suggests that despite the resource windfalls of the mining municipalities, it is not clear if these municipalities invest more resources in public education than other localities.

Suggested Citation

  • Oyarzo, Mauricio & Paredes, Dusan, 2021. "The impact of mining taxes on public education: Evidence for mining municipalities in Chile," Resources Policy, Elsevier, vol. 70(C).
    • Handle: RePEc:eee:jrpoli:v:70:y:2021:i:c:s0301420717304154
    DOI: 10.1016/j.resourpol.2018.05.018
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0301420717304154
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.resourpol.2018.05.018?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Dahlberg, Matz & Mörk, Eva & Rattsø, Jørn & Ågren, Hanna, 2008. "Using a discontinuous grant rule to identify the effect of grants on local taxes and spending," Journal of Public Economics, Elsevier, vol. 92(12), pages 2320-2335, December.
    2. Fernanda Brollo & Tommaso Nannicini & Roberto Perotti & Guido Tabellini, 2013. "The Political Resource Curse," American Economic Review, American Economic Association, vol. 103(5), pages 1759-1796, August.
    3. Dobra, John & Dobra, Matt, 2013. "State mineral production taxes and mining law reform," Resources Policy, Elsevier, vol. 38(2), pages 162-168.
    4. Andrews-Speed, Philip & Rogers, Christopher D., 1999. "Mining taxation issues for the future," Resources Policy, Elsevier, vol. 25(4), pages 221-227, December.
    5. Gylfason, Thorvaldur, 2001. "Natural resources, education, and economic development," European Economic Review, Elsevier, vol. 45(4-6), pages 847-859, May.
    6. Guy Michaels, 2011. "The Long Term Consequences of Resource‐Based Specialisation," Economic Journal, Royal Economic Society, vol. 121(551), pages 31-57, March.
    7. Lane, Philip R., 2003. "The cyclical behaviour of fiscal policy: evidence from the OECD," Journal of Public Economics, Elsevier, vol. 87(12), pages 2661-2675, December.
    8. Yan Zhou & Peter X.-K. Song, 2016. "Regression analysis of networked data," Biometrika, Biometrika Trust, vol. 103(2), pages 287-301.
    9. Bjorvatn, Kjetil & Farzanegan, Mohammad Reza & Schneider, Friedrich, 2012. "Resource Curse and Power Balance: Evidence from Oil-Rich Countries," World Development, Elsevier, vol. 40(7), pages 1308-1316.
    10. Frederick van der Ploeg & Steven Poelhekke, 2009. "Volatility and the natural resource curse," Oxford Economic Papers, Oxford University Press, vol. 61(4), pages 727-760, October.
    11. Douangngeune, Bounlouane & Hayami, Yujiro & Godo, Yoshihisa, 2005. "Education and natural resources in economic development: Thailand compared with Japan and Korea," Journal of Asian Economics, Elsevier, vol. 16(2), pages 179-204, April.
    12. Shao, Shuai & Yang, Lili, 2014. "Natural resource dependence, human capital accumulation, and economic growth: A combined explanation for the resource curse and the resource blessing," Energy Policy, Elsevier, vol. 74(C), pages 632-642.
    13. José M. R. Murteira, 2016. "Goodness-of-link tests for multivariate regression models," Communications in Statistics - Theory and Methods, Taylor & Francis Journals, vol. 45(24), pages 7367-7375, December.
    14. Emerson, Craig, 1982. "Mining enclaves and taxation," World Development, Elsevier, vol. 10(7), pages 561-571, July.
    15. Dusan Paredes, 2013. "The Role of Human Capital, Market Potential and Natural Amenities in Understanding Spatial Wage Disparities in Chile," Spatial Economic Analysis, Taylor & Francis Journals, vol. 8(2), pages 154-175, June.
    16. Annabi, Nabil & Harvey, Simon & Lan, Yu, 2011. "Public expenditures on education, human capital and growth in Canada: An OLG model analysis," Journal of Policy Modeling, Elsevier, vol. 33(6), pages 852-865.
    17. David S. Lee & Thomas Lemieux, 2010. "Regression Discontinuity Designs in Economics," Journal of Economic Literature, American Economic Association, vol. 48(2), pages 281-355, June.
    18. Henry Ergas & Jonathan Pincus, 2014. "Have Mining Royalties Been Beneficial to Australia?," Economic Papers, The Economic Society of Australia, vol. 33(1), pages 13-28, March.
    19. Victor Polterovich, Vladimir Popov, Alexander Tonis, 2010. "Resource abundance: A curse or blessing?," Working Papers 93, United Nations, Department of Economics and Social Affairs.
    20. Paredes, Dusan & Rivera, Nathaly M., 2017. "Mineral taxes and the local public goods provision in mining communities," Resources Policy, Elsevier, vol. 53(C), pages 328-339.
    21. Hughes, Helen, 1975. "Economic rents, the distribution of gains from mineral exploitation, and mineral development policy," World Development, Elsevier, vol. 3(11-12), pages 811-825.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Arratia-Solar, Andrea & Paredes, Dusan, 2023. "Commodity price and fatalities in mining – Evidence from copper regions in Chile," Resources Policy, Elsevier, vol. 82(C).
    2. Rey-Martí, Andrea & Valencia-Toledo, Alfredo & Chaparro-Banegas, Nuria & Mas-Tur, Alicia & Roig-Tierno, Norat, 2023. "Developing models to assess the social impact of mining: An exploratory study trough necessary conditions analysis (NCA)," Resources Policy, Elsevier, vol. 83(C).
    3. Oyarzo, Mauricio & Paredes, Dusan, 2023. "Shocks derived from mining windfalls and horizontal transfers: Exploring the permanent income hypothesis in Chilean municipalities from a spatial competition approach," Socio-Economic Planning Sciences, Elsevier, vol. 86(C).
    4. Irarrazaval, Felipe, 2022. "Social protest at mining territories: Examining contentious politics at mining districts in Chile," Resources Policy, Elsevier, vol. 78(C).
    5. Mononen, Tuija & Sihvonen, Jukka & Sairinen, Rauno & Tiainen, Heidi, 2023. "Local governance of the mining industry—five Finnish examples," Resources Policy, Elsevier, vol. 82(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Paredes, Dusan & Rivera, Nathaly M., 2017. "Mineral taxes and the local public goods provision in mining communities," Resources Policy, Elsevier, vol. 53(C), pages 328-339.
    2. Oyarzo, Mauricio & Paredes, Dusan, 2019. "Revisiting the link between resource windfalls and subnational crowding out for local mining economies in Chile," Resources Policy, Elsevier, vol. 64(C).
    3. Ruba A. Aljarallah & Andrew Angus, 2020. "Dilemma of Natural Resource Abundance: A Case Study of Kuwait," SAGE Open, , vol. 10(1), pages 21582440198, January.
    4. Alssadek, Marwan & Benhin, James, 2023. "Natural resource curse: A literature survey and comparative assessment of regional groupings of oil-rich countries," Resources Policy, Elsevier, vol. 84(C).
    5. Pérez, Claudia & Claveria, Oscar, 2020. "Natural resources and human development: Evidence from mineral-dependent African countries using exploratory graphical analysis," Resources Policy, Elsevier, vol. 65(C).
    6. Dauvin, Magali & Guerreiro, David, 2017. "The Paradox of Plenty: A Meta-Analysis," World Development, Elsevier, vol. 94(C), pages 212-231.
    7. Cockx, Lara & Francken, Nathalie, 2014. "Extending the concept of the resource curse: Natural resources and public spending on health," Ecological Economics, Elsevier, vol. 108(C), pages 136-149.
    8. Tsvetkova, Alexandra & Partridge, Mark, 2017. "The shale revolution and entrepreneurship: An assessment of the relationship between energy sector expansion and small business entrepreneurship in US counties," Energy, Elsevier, vol. 141(C), pages 423-434.
    9. Weinstein, Amanda & Partridge, Mark & Tsvetkova, Alexandra, 2017. "Follow the Money: How Does the Income Flow After an Energy Boom," MPRA Paper 77336, University Library of Munich, Germany.
    10. Bracco, Emanuele & Lockwood, Ben & Porcelli, Francesco & Redoano, Michela, 2015. "Intergovernmental grants as signals and the alignment effect: Theory and evidence," Journal of Public Economics, Elsevier, vol. 123(C), pages 78-91.
    11. Waqar Wadho & Sadia Hussain, 2023. "Ethnic diversity, concentration of political power and the curse of natural resources," Economia Politica: Journal of Analytical and Institutional Economics, Springer;Fondazione Edison, vol. 40(1), pages 113-137, April.
    12. Sanginabadi, Bahram, 2021. "Oil and Mortality," OSF Preprints j2xqw, Center for Open Science.
    13. Henry, Alexandre, 2019. "Transmission channels of the resource curse in Africa: A time perspective," Economic Modelling, Elsevier, vol. 82(C), pages 13-20.
    14. Mignamissi, Dieudonné & Malah Kuete, Yselle Flora, 2021. "Resource rents and happiness on a global perspective: The resource curse revisited," Resources Policy, Elsevier, vol. 71(C).
    15. Abdul HANNAN* & Hasan M. MOHSIN**, 2015. "Regional Analysis of Resource Curse Hypothesis: Evidence from Panel Data," Pakistan Journal of Applied Economics, Applied Economics Research Centre, vol. 25(1), pages 45-66.
    16. Lashitew, Addisu A. & Werker, Eric, 2020. "Do natural resources help or hinder development? Resource abundance, dependence, and the role of institutions," Resource and Energy Economics, Elsevier, vol. 61(C).
    17. Elena Esposito & Scott F. Abramson, 2021. "The European coal curse," Journal of Economic Growth, Springer, vol. 26(1), pages 77-112, March.
    18. Nicoletta Corrocher & Camilla Lenzi & Marie-Louise Deshaires, 2020. "The curse of natural resources: an empirical analysis of European regions," Regional Studies, Taylor & Francis Journals, vol. 54(12), pages 1694-1708, December.
    19. Vasilyeva, Olga & Libman, Alexander, 2020. "Varieties of authoritarianism matter: Elite fragmentation, natural resources and economic growth," European Journal of Political Economy, Elsevier, vol. 63(C).
    20. Raveh, Ohad & Perez-Sebastian, Fidel & van der Ploeg, Frederick, 2024. "Are Technology Improvements Contractionary? The Role of Natural Resources," MPRA Paper 120355, University Library of Munich, Germany.

    More about this item

    Keywords

    Public education; Mining taxes; Local governments;
    All these keywords.

    JEL classification:

    • H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General
    • H40 - Public Economics - - Publicly Provided Goods - - - General
    • H71 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Taxation, Subsidies, and Revenue
    • I25 - Health, Education, and Welfare - - Education - - - Education and Economic Development
    • Q32 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Exhaustible Resources and Economic Development
    • Q34 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Natural Resources and Domestic and International Conflicts

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:jrpoli:v:70:y:2021:i:c:s0301420717304154. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/inca/30467 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.