IDEAS home Printed from https://ideas.repec.org/p/nst/samfok/16114.html
   My bibliography  Save this paper

Natural Rerources and public Sector Wages

Author

Listed:
  • Pernille Parmer

    (Department of Economics, Norwegian University of Science and Technology)

Abstract

This paper studies the effects of natural resource abundance on wages for local public sector leaders in Norway. Local governments with high public revenues from the hydropower sector have fewer economic constraints compared with other local governments. High revenues might make it easier for public sector leaders to use their political power to increase leader wages relative to the wages received by other working groups. Novel data on local public sector wages, in combination with an exogenous instrument for hydropower revenues, lead to a unique empirical framework for this analysis. The instrumental variable estimates exploit the variation in geographical and topological characteristics, such as the length of rivers, river slope, water ow volume, and precipitation. Although the results indicate that public sector wages are positively a ected by local government revenues, there is no evidence that the revenue effect is stronger for leader wages than for the wages of other working groups.

Suggested Citation

  • Pernille Parmer, 2014. "Natural Rerources and public Sector Wages," Working Paper Series 16114, Department of Economics, Norwegian University of Science and Technology.
    • Handle: RePEc:nst:samfok:16114
    as

    Download full text from publisher

    File URL: http://www.svt.ntnu.no/iso/WP/2014/Parmer_2014wp2.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Brunnschweiler, Christa N. & Bulte, Erwin H., 2008. "The resource curse revisited and revised: A tale of paradoxes and red herrings," Journal of Environmental Economics and Management, Elsevier, vol. 55(3), pages 248-264, May.
    2. Halvor Mehlum & Karl Moene & Ragnar Torvik, 2006. "Institutions and the Resource Curse," Economic Journal, Royal Economic Society, vol. 116(508), pages 1-20, January.
    3. Rabah Arezki & Markus Brückner, 2012. "Commodity Windfalls, Democracy and External Debt," Economic Journal, Royal Economic Society, vol. 122(561), pages 848-866, June.
    4. Jeffrey D. Sachs & Andrew M. Warner, 1995. "Natural Resource Abundance and Economic Growth," NBER Working Papers 5398, National Bureau of Economic Research, Inc.
    5. Silje Aslaksen, 2010. "Oil and democracy: More than a cross-country correlation?," Journal of Peace Research, Peace Research Institute Oslo, vol. 47(4), pages 421-431, July.
    6. Kevin K. Tsui, 2011. "More Oil, Less Democracy: Evidence from Worldwide Crude Oil Discoveries," Economic Journal, Royal Economic Society, vol. 121(551), pages 89-115, March.
    7. Collier, Paul & Goderis, Benedikt, 2012. "Commodity prices and growth: An empirical investigation," European Economic Review, Elsevier, vol. 56(6), pages 1241-1260.
    8. Freeman, Richard B, 1986. "Unionism Comes to the Public Sector," Journal of Economic Literature, American Economic Association, vol. 24(1), pages 41-86, March.
    9. Baland, Jean-Marie & Francois, Patrick, 2000. "Rent-seeking and resource booms," Journal of Development Economics, Elsevier, vol. 61(2), pages 527-542, April.
    10. Francesco Caselli & Guy Michaels, 2013. "Do Oil Windfalls Improve Living Standards? Evidence from Brazil," American Economic Journal: Applied Economics, American Economic Association, vol. 5(1), pages 208-238, January.
    11. Torberg Falch & Bjarne Strøm, 2006. "Local flexibility in wage setting: evidence from the Norwegian local public sector," Empirical Economics, Springer, vol. 31(1), pages 113-142, March.
    12. Vicente, Pedro C., 2010. "Does oil corrupt? Evidence from a natural experiment in West Africa," Journal of Development Economics, Elsevier, vol. 92(1), pages 28-38, May.
    13. Arezki, Rabah & Brückner, Markus, 2012. "Commodity windfalls, polarization, and net foreign assets: Panel data evidence on the voracity effect," Journal of International Economics, Elsevier, vol. 86(2), pages 318-326.
    14. Borge, Lars-Erik & Parmer, Pernille & Torvik, Ragnar, 2015. "Local natural resource curse?," Journal of Public Economics, Elsevier, vol. 131(C), pages 101-114.
    15. H. Naci Mocan & Turan G. Bali, 2010. "Asymmetric Crime Cycles," The Review of Economics and Statistics, MIT Press, vol. 92(4), pages 899-911, November.
    16. Pius V. Fischer, 2006. "Rent-Seeking, Institutions and Reforms In Africa," Springer Books, Springer, number 978-0-387-33773-9, June.
    17. Douglas Staiger & James H. Stock, 1997. "Instrumental Variables Regression with Weak Instruments," Econometrica, Econometric Society, vol. 65(3), pages 557-586, May.
    18. Collier, Paul & Goderis, Benedikt, 2008. "Commodity Prices, Growth, and the Natural Resource Curse: Reconciling a Conundrum," MPRA Paper 17315, University Library of Munich, Germany.
    19. Torvik, Ragnar, 2002. "Natural resources, rent seeking and welfare," Journal of Development Economics, Elsevier, vol. 67(2), pages 455-470, April.
    20. Michael Alexeev & Robert Conrad, 2009. "The Elusive Curse of Oil," The Review of Economics and Statistics, MIT Press, vol. 91(3), pages 586-598, August.
    21. Philip R. Lane & Aaron Tornell, 1999. "The Voracity Effect," American Economic Review, American Economic Association, vol. 89(1), pages 22-46, March.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Borge, Lars-Erik & Parmer, Pernille & Torvik, Ragnar, 2015. "Local natural resource curse?," Journal of Public Economics, Elsevier, vol. 131(C), pages 101-114.
    2. Eoin McGuirk, 2013. "The illusory leader: natural resources, taxation and accountability," Public Choice, Springer, vol. 154(3), pages 285-313, March.
    3. Smith, Brock, 2015. "The resource curse exorcised: Evidence from a panel of countries," Journal of Development Economics, Elsevier, vol. 116(C), pages 57-73.
    4. Bhattacharyya, Sambit & Hodler, Roland, 2010. "Natural resources, democracy and corruption," European Economic Review, Elsevier, vol. 54(4), pages 608-621, May.
    5. Kaznacheev, Peter, 2013. "Resource Rents and Economic Growth: Economic and institutional development in countries with a high share of income from the sale of natural resources. Analysis and recommendations based on internatio," EconStor Research Reports 121950, ZBW - Leibniz Information Centre for Economics.
    6. Traviss Cassidy, 2019. "The Long-Run Effects of Oil Wealth on Development: Evidence from Petroleum Geology," The Economic Journal, Royal Economic Society, vol. 129(623), pages 2745-2778.
    7. Frederick van der Ploeg, 2011. "Natural Resources: Curse or Blessing?," Journal of Economic Literature, American Economic Association, vol. 49(2), pages 366-420, June.
    8. Maldonado, Stanislao, 2014. "The Non-Monotonic Political Effects of Resource Booms," MPRA Paper 85649, University Library of Munich, Germany, revised 18 Dec 2017.
    9. Thorvaldur Gylfason & Gylfi Zoega, 2017. "The Dutch Disease in Reverse: Iceland's Natural Experiment," CESifo Working Paper Series 6513, CESifo.
    10. Rabah Arezki & Frederick van der Ploeg, 2011. "Do Natural Resources Depress Income Per Capita?," Review of Development Economics, Wiley Blackwell, vol. 15(3), pages 504-521, August.
    11. Al-Ubaydli, Omar, 2012. "Natural resources and the tradeoff between authoritarianism and development," Journal of Economic Behavior & Organization, Elsevier, vol. 81(1), pages 137-152.
    12. repec:elg:eechap:15325_14 is not listed on IDEAS
    13. Collier, Paul & Goderis, Benedikt, 2012. "Commodity prices and growth: An empirical investigation," European Economic Review, Elsevier, vol. 56(6), pages 1241-1260.
    14. Alssadek, Marwan & Benhin, James, 2023. "Natural resource curse: A literature survey and comparative assessment of regional groupings of oil-rich countries," Resources Policy, Elsevier, vol. 84(C).
    15. Nuno Torres & Óscar Afonso & Isabel Soares, 2013. "A survey of literature on the resource curse: critical analysis of the main explanations, empirical tests and resource proxies," CEF.UP Working Papers 1302, Universidade do Porto, Faculdade de Economia do Porto.
    16. Dauvin, Magali & Guerreiro, David, 2017. "The Paradox of Plenty: A Meta-Analysis," World Development, Elsevier, vol. 94(C), pages 212-231.
    17. Chandan Sharma & Debdatta Pal, 2021. "Revisiting resource curse puzzle: new evidence from heterogeneous panel analysis," Applied Economics, Taylor & Francis Journals, vol. 53(8), pages 897-912, February.
    18. Edwards, Ryan B., 2016. "Mining away the Preston curve," World Development, Elsevier, vol. 78(C), pages 22-36.
    19. Cockx, Lara & Francken, Nathalie, 2016. "Natural resources: A curse on education spending?," Energy Policy, Elsevier, vol. 92(C), pages 394-408.
    20. Dong-Hyeon Kim & Shu-Chin Lin, 2017. "Natural Resources and Economic Development: New Panel Evidence," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 66(2), pages 363-391, February.
    21. Adams, Dawda & Ullah, Subhan & Akhtar, Pervaiz & Adams, Kweku & Saidi, Samir, 2019. "The role of country-level institutional factors in escaping the natural resource curse: Insights from Ghana," Resources Policy, Elsevier, vol. 61(C), pages 433-440.

    More about this item

    Keywords

    Public sector wages; resource curse; rent-seeking; identification; local governments; political economy;
    All these keywords.

    JEL classification:

    • D78 - Microeconomics - - Analysis of Collective Decision-Making - - - Positive Analysis of Policy Formulation and Implementation
    • H27 - Public Economics - - Taxation, Subsidies, and Revenue - - - Other Sources of Revenue
    • H71 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Taxation, Subsidies, and Revenue
    • H75 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Government: Health, Education, and Welfare
    • Q2 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:nst:samfok:16114. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Anne Larsen (email available below). General contact details of provider: https://edirc.repec.org/data/isontno.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.