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Human Capital, Industrial Growth and Resource Curse

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  • Elena Suslova
  • Natalya Volchkova

    ()
    (New Economic School, CEFIR)

Abstract

How the country’s natural resource abundance affects the industrial growth? We argue that one of the transmission mechanisms is via the accumulation of country’s high skilled human capital. In particular, we empirically investigate whether link between country’s natural resource endowment and industry-level growth depends on industry human capital requirement. We show that in the 1980s and the 1990s, industrial sectors that are high-skilled labor intensive developed disproportionately slowly in countries with higher contribution of natural resource sectors to GDP. While low-skilled labor intensity did not differentiate industrial growth between resource rich and resource poor countries. Our findings are in line with the theoretical argument that deteriorative effect of natural resources on the development of industrial sector is a byproduct of the capital accumulation process in the resource abundant open economy that slows down the development of marginally high-skilled labor force compared to the resource poor economies.

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File URL: http://www.cas.hse.ru/Repec/pdf/WP13_2007_11.pdf
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Bibliographic Info

Paper provided by Laboratory for Macroeconomic Analysis in its series Working Papers with number WP13_2007_11.

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Length: 28 pages
Date of creation: Jan 2007
Date of revision:
Handle: RePEc:cas:wpaper:wp13_2007_11

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Cited by:
  1. Alexander Plekhanov & Sergei Guriev & Konstantin Sonin, 2009. "Development based on commodity revenues," Working Papers 108, European Bank for Reconstruction and Development, Office of the Chief Economist.

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