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Natural Resource Abundance and Human Capital Accumulation

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Author Info
Jean-Philippe C. Stijns (University of California at Berkeley)

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Abstract

This study examines indicators of human capital accumulation together with data for natural resource abundance and rents in a panel of 102 countries running from 1970 to 1999. Mineral wealth makes a positive and marked difference on human capital accumulation. Matching on observables reveals that cross-country results are not driven by a third factor such as overall economic development. Political stability does seem to affect both human capital accumulation and subsoil wealth, but not enough to overturn my conclusions. Instrumentation reveals that reverse causality running from education to natural resources does not drive the results. Estimation of a panel VAR indicates that, over the three decades, a $1 shock to resource rent generates five cents of extra educational expenditure per year. These results are consistent with Hirschman’s conjecture that enclave economies have weaker production leakages but stronger government revenue linkages than other activities. The “wealth channel” identified in this paper implies that caution should be exerted when discouraging countries from exploiting their mineral wealth, especially for countries where human capital is scarce.

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Publisher Info
Paper provided by EconWPA in its series Development and Comp Systems with number 0112001.

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Length: 36 pages
Date of creation: 20 Dec 2001
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Handle: RePEc:wpa:wuwpdc:0112001

Note: Type of Document - Adobe PDF 1.3; prepared on IBM PC; to print on HP/PostScript; pages: 36 ; figures: included . Draft - Comments and suggestions most welcome.
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Related research
Keywords: education; natural resources; resource booms; economic development;

Find related papers by JEL classification:
O13 - Economic Development, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
Q33 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Resource Booms (Dutch Disease)
I22 - Health, Education, and Welfare - - Education - - - Educational Finance

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. David, Paul A & Wright, Gavin, 1997. "Increasing Returns and the Genesis of American Resource Abundance," Industrial and Corporate Change, Oxford University Press, vol. 6(2), pages 203-45, March.
  2. Nehru, Vikram & Swanson, Eric & Dubey, Ashutosh, 1995. "A new database on human capital stock in developing and industrial countries: Sources, methodology, and results," Journal of Development Economics, Elsevier, vol. 46(2), pages 379-401, April. [Downloadable!] (restricted)
  3. Persson, Torsten & Tabellini, Guido & Trebbi, Francesco, 2001. "Electoral Rules and Corruption," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich. [Downloadable!]
    Other versions:
  4. Edward L. Glaeser & Andrei Shleifer, 2001. "Legal Origins," Harvard Institute of Economic Research Working Papers 1920, Harvard - Institute of Economic Research. [Downloadable!]
    Other versions:
  5. James Heckman & Hidehiko Ichimura & Jeffrey Smith & Petra Todd, 1998. "Characterizing Selection Bias Using Experimental Data," Econometrica, Econometric Society, vol. 66(5), pages 1017-1098, September.
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  6. Robert J. Barro, 2001. "Human Capital and Growth," American Economic Review, American Economic Association, vol. 91(2), pages 12-17, May. [Downloadable!] (restricted)
  7. Heckman, James J & Ichimura, Hidehiko & Todd, Petra, 1998. "Matching as an Econometric Evaluation Estimator," Review of Economic Studies, Blackwell Publishing, vol. 65(2), pages 261-94, April. [Downloadable!] (restricted)
  8. J. Bradford De Long & Andrei Shleifer, . "Princes and Merchants: City Growth Before the Industrial Revolution," J. Bradford De Long's Working Papers _111, University of California at Berkeley, Economics Department. [Downloadable!]
  9. 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. [Downloadable!] (restricted)
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. James L. Butkiewicz & Halit Yanikkaya, 2007. "Minerals, Openness, Institutions and Growth: An Empirical Analysis," Working Papers 07-04, University of Delaware, Department of Economics. [Downloadable!]
  2. repec:bep:buspol:9:2007:2:1199-1199 is not listed on IDEAS
  3. Bravo-Ortega, Claudio & de Gregorio, Jose, 2005. "The relative richness of the poor? natural resources, human capital, and economic growth," Policy Research Working Paper Series 3484, The World Bank. [Downloadable!]
    Other versions:
  4. Elliot, Vaughn & Hartarska, Valentina & Bailey, Conner, 2008. "Stunted Growth: Natural Resource Concentration, Economic Growth, and Dutch Disease in the Southeastern United States," 2008 Annual Meeting, February 2-6, 2008, Dallas, Texas 6494, Southern Agricultural Economics Association. [Downloadable!]
  5. Hamdani, Nisar Hussain & Shah, Syed Akhter Hussain, 2005. "Earthquake 2005: Some Implications for Environment and Human Capital," MPRA Paper 9519, University Library of Munich, Germany. [Downloadable!]
  6. Lederman, Daniel & Maloney, William F., 2003. "Trade structure and growth," Policy Research Working Paper Series 3025, The World Bank. [Downloadable!]
  7. Anneli Kaasa, 2005. "Factors Of Income Inequality And Their Influence Mechanisms: A Theoretical Overview," University of Tartu - Faculty of Economics and Business Administration Working Paper Series 40, Faculty of Economics and Business Administration, University of Tartu (Estonia). [Downloadable!]
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This page was last updated on 2009-11-13.

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