An empirical analysis on the relationship between resource rents and education: the role of institutional quality thresholds

Soran Mohtadi ()
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Soran Mohtadi: Johns Hopkins University

International Review of Economics, 2023, vol. 70, issue 2, No 4, 217-236

Abstract: Abstract This paper investigates the impact of resource rents, specifically those from oil and gas, on education, with a focus on the role of institutional quality. Using a sample of 103 countries and a panel data analysis covering the period 1984–2020, the paper employs econometric threshold analysis to classify countries based on their institutional quality. The results indicate that in countries with weaker institutions, oil and gas rents have a negative impact on education levels. However, in countries with stronger institutions, the impact of resource rents on education is positive and significant. By adopting the threshold regression model, which considers the concept of threshold effects, this study contributes to the existing literature by examining the existence of an institutional quality threshold that captures the rich dynamics between resource rents and education. These findings have important policy implications, highlighting the heterogeneity in the role of resource rents in the economy, depending on the quality of political institutions.

Keywords: Oil and gas rents; Education; Institutional quality; Threshold effects (search for similar items in EconPapers)
JEL-codes: C24 I25 O1 O13 (search for similar items in EconPapers)
Date: 2023
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DOI: 10.1007/s12232-023-00416-9

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