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Natural resources and education outcomes in the United States

Alexander James

Resource and Energy Economics, 2017, vol. 49, issue C, 150-164

Abstract: Existing development literature has argued that natural-resource endowments “curse” economic prosperity by reducing expenditures on education. According to this theory, public and private agents lack sufficient foresight to make optimal economic decisions and become poor as a result. Using a panel of U.S. state-level data, this paper offers evidence to the contrary. Public spending on education in resource-rich states greatly exceeds that in resource-scarce ones, and private education services are imperfectly crowded out as a result. Analyzing a broader set of public education outcomes reveals that relative teacher salaries, public enrollment rates, and teacher–student ratios tend to move pro-cyclically with resource booms and busts. Weaker evidence is provided that graduation rates fall in response to resource booms, perhaps reflecting a rise in the opportunity cost of going to school for working-age students.

Keywords: Natural resources; Education expenditures; Education attainment; Resource curse (search for similar items in EconPapers)
JEL-codes: Q4 H4 I2 (search for similar items in EconPapers)
Date: 2017
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DOI: 10.1016/j.reseneeco.2017.04.004

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