Is education really underfunded in resource-rich economies? Evidence from a panel of U.S. states

Alexander James

No 2015-01, Working Papers from University of Alaska Anchorage, Department of Economics

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. More generally, this paper highlights the importance of exploiting both spatial and temporal variation in resource wealth when studying resource-rich economies.

Keywords: Natural Resources; Education; Public Policy; Resource Curse (search for similar items in EconPapers)
JEL-codes: Q32 Q33 Q38 (search for similar items in EconPapers)
Date: 2015-01
New Economics Papers: this item is included in nep-edu, nep-ene and nep-ure
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Citations: View citations in EconPapers (4)

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