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The impact of mining patents on public education: evidence for mining municipalities in Chile

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  • Mauricio Alejandro Oyarzo Aguilar

    (Departamento de Economía, Universidad Católica del Norte, Chile)

  • Dusan Paredes Araya

    (Departamento de Economía, Universidad Católica del Norte, Chile)

Abstract

Chilean mining municipalities collect a mineral tax to compensate the negative externalities associated with resource extraction. This collection implies a positive marginal impact on local finance to improve the quality of life in the mining communities. However, there is not enough empirical evidence to support this causal mechanism. This article contributes to cover this knowledge gap with a unique experimental framework proposed by the Chilean tax system. Mining law indicates that municipalities above an exogenous threshold are able to keep this extra income. We use this Regression Discontinuity Design to identify the causal effect in public education indicators of the mining communities. Our results show that the mining municipalities these have a worse educational performance. In addition, the levels of spending in public education are not significant, which accounts for the disadvantaged position in relation to the high dependence on extractive activities.

Suggested Citation

  • Mauricio Alejandro Oyarzo Aguilar & Dusan Paredes Araya, 2017. "The impact of mining patents on public education: evidence for mining municipalities in Chile," Documentos de Trabajo en Economia y Ciencia Regional 72, Universidad Catolica del Norte, Chile, Department of Economics, revised Aug 2017.
    • Handle: RePEc:cat:dtecon:dt201701
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    References listed on IDEAS

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    Keywords

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    JEL classification:

    • H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General
    • H40 - Public Economics - - Publicly Provided Goods - - - General
    • H70 - Public Economics - - State and Local Government; Intergovernmental Relations - - - General
    • H32 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Firm
    • I25 - Health, Education, and Welfare - - Education - - - Education and Economic Development

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