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Commodity Booms, Human Capital, and Economic Growth: An Application to Colombia

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  • Iader Giraldo
  • Ricardo Arguello
  • Nataly Herrera

Abstract

The idea that a trade-off exists between current levels of consumption and future levels of human capital is modeled. As shocks in international commodity prices affect income and modify the optimal consumption basket, household members adjust their time preferences between school and work. As a result, the dynamics of human-capital accumulation may be affected and, in cases in which commodity production and trade play a significant role in the economy, such dynamics may also have an impact on economic growth and the composition of economic sectors. Using a dynamic CGE model and Colombian macroeconomic data, we showed how shocks in commodity prices determined households’ educational demands and, at the same time, the composition of the labor market.

Suggested Citation

  • Iader Giraldo & Ricardo Arguello & Nataly Herrera, 2019. "Commodity Booms, Human Capital, and Economic Growth: An Application to Colombia," Working Papers MPIA 2019-12, PEP-MPIA.
  • Handle: RePEc:lvl:mpiacr:2019-12
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    More about this item

    Keywords

    Commodity Booms; Human Capital; CGE modeling; Colombia;
    All these keywords.

    JEL classification:

    • C68 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computable General Equilibrium Models
    • I25 - Health, Education, and Welfare - - Education - - - Education and Economic Development
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products

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