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Mining away the Preston curve

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  • Edwards, Ryan B.

Abstract

I estimate the long-term national health and education impacts of having a larger mining share in the economy. By instrumenting the relative size of the mining sector with the natural geological variation in countries’ fossil fuel endowments, I provide evidence suggestive of a causal relationship. The findings suggest that countries with larger mining shares tend to have poorer health and education outcomes than countries with similar per capita incomes, geographic characteristics, and institutional quality. Doubling the mining share of an economy corresponds to, on average, the infant death rate being 20% higher, life expectancy being 5% lower, total years of education being 20% lower, and 70% more people having no formal education. Divergences from the Preston curve—the concave relationship between cross-country income and life expectancy that has long been of interest to economists, demographers, and epidemiologists—are thus partly explained by the size of the mining sector. Within-country evidence from Indonesia paints a similar picture. My results provide support for a growing body of evidence linking mining to poorer average living standards, particularly vis-à-vis other types of income. I also estimate the effects of national mining dependence on non-mining income, health and education investment, and institutions.

Suggested Citation

  • Edwards, Ryan B., 2016. "Mining away the Preston curve," World Development, Elsevier, vol. 78(C), pages 22-36.
  • Handle: RePEc:eee:wdevel:v:78:y:2016:i:c:p:22-36
    DOI: 10.1016/j.worlddev.2015.10.013
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    2. Dominic P. Parker & Jeremy D. Foltz & David Elsea, 2016. "Unintended consequences of economic sanctions for human rights Conflict minerals and infant mortality in the Democratic Republic of the Congo," WIDER Working Paper Series 124, World Institute for Development Economic Research (UNU-WIDER).
    3. repec:aen:journl:ej39-2-burke is not listed on IDEAS
    4. Jetter, Michael & Laudage, Sabine & Stadelmann, David, 2016. "The Intimate Link between Income Levels and Life Expectancy: Global Evidence from 213 Years," IZA Discussion Papers 10015, Institute for the Study of Labor (IZA).
    5. Paddy Carter & Alex Cobham, 2016. "Are taxes good for your health?," WIDER Working Paper Series 171, World Institute for Development Economic Research (UNU-WIDER).
    6. Paul J. Burke and Ashani Abayasekara, 2018. "The Price Elasticity of Electricity Demand in the United States: A Three-Dimensional Analysis," The Energy Journal, International Association for Energy Economics, vol. 0(Number 2).

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