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Mining and Human Capital Accumulation: the Role of the Return to Education

Author

Listed:
  • Gustavo Yamada

    (Universidad del Pacífico)

  • Oswaldo Molina

    (Universidad del Pacífico)

  • Daniel Velásquez

    (Universidad del Pacífico)

Abstract

The literature has long tried to explain the casual relationship between natural resources booms and human capital accumulation but yet with no definitive answer. Usually the literature finds that booms abates the process of human capital accumulation by increasing the cost of opportunity of studying. We want to further contribute to this discussion by studying the impact of the mineral mining boom in Peru on the interruption of post-secondary studies during the period 2004-2016. To do so, we rely on a differences-in-difference strategy. Our results show that the Peruvian mining boom had a positive impact on the probability of interruption of post-secondary studies. Furthermore, the probability of staying idle of young individuals increased. In contrast with previous studies, we find that our results are driven mainly by a decrease in the return to higher education relative to high-school education. Other mechanisms that may be playing a minor role is the health status of young individuals -which deteriorates with the mining boom-, and the labor reallocation that occurs within households.

Suggested Citation

  • Gustavo Yamada & Oswaldo Molina & Daniel Velásquez, 2018. "Mining and Human Capital Accumulation: the Role of the Return to Education," Working Papers 135, Peruvian Economic Association.
    • Handle: RePEc:apc:wpaper:135
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    References listed on IDEAS

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    Cited by:

    1. Balza, Lenin & De Los Rios, Camilo & Rivera, Nathaly M., 2022. "Digging Deep: Resource Exploitation and Higher Education," IDB Publications (Working Papers) 12451, Inter-American Development Bank.

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    More about this item

    JEL classification:

    • D13 - Microeconomics - - Household Behavior - - - Household Production and Intrahouse Allocation
    • I23 - Health, Education, and Welfare - - Education - - - Higher Education; Research Institutions
    • J46 - Labor and Demographic Economics - - Particular Labor Markets - - - Informal Labor Market
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products

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