The Value of Redistribution: Natural Resources and the Formation of Human Capital under Weak Institutions

Arbeitspapier

We exploit time and spatial variation generated by the commodities boom to measure the effect of natural resources on human capital formation in Peru, a country with low governance indicators. Combining test scores from over two million students and district-level administrative data on mining production and the redistribution of mining taxes to local governments, we find no effect from production. However, redistribution of mining taxes increases math test scores by 0.23 standard deviations. We identify the improvements in the quality of teachers and in school infrastructure, together with increases in adult employment and health outcomes of adults and children, as key mechanisms from the redistribution. Policy implications for the avoidance of the natural resource curse are discussed.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: IZA Discussion Papers ; No. 10884

Classification and Topics

• Classification: Wirtschaft ; Taxation and Subsidies: Externalities; Redistributive Effects; Environmental Taxes and Subsidies ; Education and Economic Development ; Economic Development: Human Resources; Human Development; Income Distribution; Migration ; Exhaustible Resources and Economic Development
• Subject: resource booms ; academic achievement ; intergovernmental transfers

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Agüero, Jorge M. ; Balcázar, Carlos Felipe ; Maldonado, Stanislao ; Nopo, Hugo R.
• Event: Veröffentlichung
• (who): Institute of Labor Economics (IZA)
• (where): Bonn
• (when): 2017

Further information

• Handle: http://hdl.handle.net/10419/170868
• Last update: 10.03.2025, 11:43 AM CET