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The impact of mining patents on public education: evidence for mining municipalities in Chile

Oyarzo Mauricio () and Dusan Paredes ()
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Oyarzo Mauricio: Departamento de Economía, Universidad Católica del Norte, Chile

No 72, Documentos de Trabajo en Economia y Ciencia Regional from Universidad Catolica del Norte, Chile, Department of Economics

Abstract: Chilean mining municipalities collect a mineral tax to compensate the negative externalities associated with resource extraction. This collection implies a positive marginal impact on local finance to improve the quality of life in the mining communities. However, there is not enough empirical evidence to support this causal mechanism. This article contributes to cover this knowledge gap with a unique experimental framework proposed by the Chilean tax system. Mining law indicates that municipalities above an exogenous threshold are able to keep this extra income. We use this Regression Discontinuity Design to identify the causal effect in public education indicators of the mining communities. Our results show that the mining municipalities these have a worse educational performance. In addition, the levels of spending in public education are not significant, which accounts for the disadvantaged position in relation to the high dependence on extractive activities.

Keywords: Public education; Mining patents; Local governments. (search for similar items in EconPapers)
JEL-codes: H20 H40 H70 H32 I25 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-dev, nep-edu and nep-lam
Date: 2017-08, Revised 2017-08
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https://sites.google.com/a/ucn.cl/wpeconomia/archivos/WP2017-01.pdf First version, 2017 (application/pdf)

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Persistent link: https://EconPapers.repec.org/RePEc:cat:dtecon:dt201701

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