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Mineral wealth and human capital accumulation: a nonparametric approach

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  • Jean-Philippe Stijns

Abstract

This article uses a nonparametric approach to investigate the nexus between mineral wealth and human capital accumulation across countries. Higher mineral wealth is associated with elevated levels of human capital in a cross-section of countries. Matching the overall level of economic development and political instability and violence, weakens but does not reverse this conclusion. These results are economically significant. Moving up from the bottom to the top quartile for subsoil wealth per capita decreases illiteracy by ≈ 12% among young and adult females. Conversely, moving down from the top to the bottom quartile for subsoil wealth per capita decreases the average years of primary and total education by ≈ 1.5 years for females. Results are consistent with Hirschman's conjecture that enclave economies have weaker production linkages but stronger government revenue linkages than other activities. Most importantly, this article argues that caution should be exercised when discouraging countries from exploiting their mineral wealth, especially for countries where human capital is scarce. I know, [there is] no safe depositary of the ultimate powers of society, but the people themselves; and if we think them not enlightened enough to exercise their control with wholesome discretion, the remedy is not to take it from them, but to inform their discretion by education. This is the true corrective of abuses of constitutional power. Letter from Thomas Jefferson to William C. Jarvis, 1820, The Writings of Thomas Jefferson, Memorial Edition (Lipscomb and Bergh, eds), Vol. 15, Washington, D.C., 1903-1904, p. 278.

Suggested Citation

  • Jean-Philippe Stijns, 2009. "Mineral wealth and human capital accumulation: a nonparametric approach," Applied Economics, Taylor & Francis Journals, vol. 41(23), pages 2925-2941.
  • Handle: RePEc:taf:applec:v:41:y:2009:i:23:p:2925-2941
    DOI: 10.1080/00036840601166900
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    1. Sachs, J-D & Warner, A-M, 1995. "Natural Resource Abundance and Economic Growth," Papers 517a, Harvard - Institute for International Development.
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    Cited by:

    1. Blanco, Luisa & Grier, Robin, 2012. "Natural resource dependence and the accumulation of physical and human capital in Latin America," Resources Policy, Elsevier, vol. 37(3), pages 281-295.
    2. Gerhard Toews & Alexander Libman, 2017. "Getting Incentives Right: Human Capital Investment and Natural Resource Booms," Working Papers 370, Leibniz Institut für Ost- und Südosteuropaforschung (Institute for East and Southeast European Studies).
    3. Lashitew, Addisu A. & Werker, Eric, 2020. "Do natural resources help or hinder development? Resource abundance, dependence, and the role of institutions," Resource and Energy Economics, Elsevier, vol. 61(C).

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