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From Wells to Wealth? Government Transfers and Human Capital

Author

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  • Acuna, Julio
  • Balza, Lenin
  • Gómez Parra, Nicolás

Abstract

To study the causal impact of oil royalties on human capital, we exploit quasi-experimental variation arising from a law in Ecuador that transfers resources to municipalities regardless of their oil-producing status. We find that royalties increase the likelihood of students completing primary and secondary education. Students reaching high school are also more likely to pass and excel on the exit exam. Furthermore, schools are more likely to remain open, increase their size, and become more road-accessible. However, the likelihood of students pursuing higher education decreases as they face steeper opportunity costs when labor demand increases.

Suggested Citation

  • Acuna, Julio & Balza, Lenin & Gómez Parra, Nicolás, 2022. "From Wells to Wealth? Government Transfers and Human Capital," IDB Publications (Working Papers) 12233, Inter-American Development Bank.
    • Handle: RePEc:idb:brikps:12233
    DOI: http://dx.doi.org/10.18235/0004262
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    References listed on IDEAS

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    1. Jordi Domenech, 2008. "Mineral resource abundance and regional growth in Spain, 1860-2000," Journal of International Development, John Wiley & Sons, Ltd., vol. 20(8), pages 1122-1135.
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    More about this item

    JEL classification:

    • I25 - Health, Education, and Welfare - - Education - - - Education and Economic Development
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • Q32 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Exhaustible Resources and Economic Development
    • Q35 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Hydrocarbon Resources

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