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Natural Resources, Redistribution and Human Capital Formation

Author

Listed:
  • Jorge M. Aguero
  • Carlos Felipe Balcázar
  • Stanislao Maldonado
  • Hugo Ñopo

Abstract

How do resource booms affect human capital accumulation? We exploit time and spatial variation generated by the commodity boom across local governments in Peru to measure the effect of natural resources on human capital formation. We explore the effect of both mining production and tax revenues on test scores, finding a substantial and statistically significant effect for the latter. Transfers to local governments from mining tax revenues are linked to an increase in math test scores of around 0.23 standard deviations. We find that the hiring of permanent teachers as well as the increases in parental employment and improvements in health outcomes of adults and children are plausible mechanisms for such large effect on learning. These findings suggest that redistributive policies could facilitate the accumulation of human capital in resource abundant developing countries as a way to avoid the natural resources curse.

Suggested Citation

  • Jorge M. Aguero & Carlos Felipe Balcázar & Stanislao Maldonado & Hugo Ñopo, 2016. "Natural Resources, Redistribution and Human Capital Formation," Documentos de Trabajo 14612, Universidad del Rosario.
    • Handle: RePEc:col:000092:014612
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    More about this item

    Keywords

    Resource booms; academic achievement; intergovernmental transfers.;
    All these keywords.

    JEL classification:

    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • I25 - Health, Education, and Welfare - - Education - - - Education and Economic Development
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration

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