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Long Term Consequences of Natural Resource Booms for Human Capital Accumulation

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  • Emery, Herb
  • Ferrer, Ana
  • Green, David

Abstract

Tight labour markets driven by resource booms could increase the opportunity cost of schooling and crowd out human capital formation. For oil producing economies like the Province of Alberta, the OPEC oil shocks of 1973 to 1981 may have had an adverse long term effect on the productivity of the labor force if the oil boom resulted in workers reducing their ultimate investment in human capital rather than merely altering the timing of schooling. We analyze the effect of this decade long oil-boom on the long-term human capital investments and productivity for Alberta birth cohorts that were of normal schooling ages before, during and after the oil boom. Our findings suggest that resource booms may change the timing of schooling but they do not reduce the total accumulation of human capital.

Suggested Citation

  • Emery, Herb & Ferrer, Ana & Green, David, 2011. "Long Term Consequences of Natural Resource Booms for Human Capital Accumulation," CLSSRN working papers clsrn_admin-2011-5, Vancouver School of Economics, revised 22 Feb 2011.
  • Handle: RePEc:ubc:clssrn:clsrn_admin-2011-5
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    File URL: http://www.clsrn.econ.ubc.ca/workingpapers/CLSRN%20Working%20Paper%20no.%2074%20-%20Emery,%20Ferrer,%20Green.pdf
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    References listed on IDEAS

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    1. Claudio Bravo-Ortega & Jose De Gregorio, "undated". "The Relative Richness of the Poor? Natural Resources, Human Capital and Economic Growth," Working Papers Central Bank of Chile 139, Central Bank of Chile.
    2. Gylfason, Thorvaldur, 2001. "Natural resources, education, and economic development," European Economic Review, Elsevier, vol. 45(4-6), pages 847-859, May.
    3. Beaudry, Paul & DiNardo, John, 1991. "The Effect of Implicit Contracts on the Movement of Wages over the Business Cycle: Evidence from Micro Data," Journal of Political Economy, University of Chicago Press, vol. 99(4), pages 665-688, August.
    4. Xin Meng & Nancy Qian, 2009. "The Long Term Consequences of Famine on Survivors: Evidence from a Unique Natural Experiment using China's Great Famine," NBER Working Papers 14917, National Bureau of Economic Research, Inc.
    5. J.C. Herbert Emery & Ronald D. Kneebone, 2008. "Socialists, Populists, Resources, and the Divergent Development of Alberta and Saskatchewan," Canadian Public Policy, University of Toronto Press, vol. 34(4), pages 419-440, December.
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    Citations

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    Cited by:

    1. Stephan E. Maurer, 2018. "Oil Discoveries and Education Spending in the Postbellum South," CEP Discussion Papers dp1526, Centre for Economic Performance, LSE.
    2. Howie, Peter & Atakhanova, Zauresh, 2014. "Resource boom and inequality: Kazakhstan as a case study," Resources Policy, Elsevier, vol. 39(C), pages 71-79.
    3. Gerhard Toews & Alexander Libman, 2017. "Getting Incentives Right: Human Capital Investment and Natural Resource Booms," Working Papers 370, Leibniz Institut f├╝r Ost- und S├╝dosteuropaforschung (Institute for East and Southeast European Studies).
    4. Rickman, Dan S. & Wang, Hongbo & Winters, John V., 2017. "Is shale development drilling holes in the human capital pipeline?," Energy Economics, Elsevier, vol. 62(C), pages 283-290.
    5. Chan, Winnie & Lu, Yuqian & Morissette, Rene, 2014. "Wages, Youth Employment, and School Enrollment: Recent Evidence from Increases in World Oil Prices," Analytical Studies Branch Research Paper Series 2014353e, Statistics Canada, Analytical Studies Branch.
    6. repec:eee:inecon:v:106:y:2017:i:c:p:165-183 is not listed on IDEAS
    7. James, Alexander, 2016. "The long-run vanity of Prudhoe Bay," Resources Policy, Elsevier, vol. 50(C), pages 270-275.
    8. Diana Alessandrini, 2014. "On the Cyclicality of Schooling Decisions: Evidence from Canadian Data," Working Paper series 16_14, Rimini Centre for Economic Analysis.
    9. Anil Kumar, 2017. "Impact of oil booms and busts on human capital investment in the USA," Empirical Economics, Springer, vol. 52(3), pages 1089-1114, May.

    More about this item

    Keywords

    Resource booms; long term human capital accumulation; OPEC oil crisis;

    JEL classification:

    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
    • I22 - Health, Education, and Welfare - - Education - - - Educational Finance; Financial Aid

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