LAERE-EfD Seminar | Digging Deep: Resource Exploitation and Higher Education

Zoom: inscripciones aquí | Register here
Live transmission: https://youtu.be/havYnEEQ3nY

Abstract:

Do resource-extraction booms crowd out investment in postsecondary education? We explore this question by examining higher education-related decisions of the universe of Chilean high school graduates during the 2000s commodities boom. On the one hand, we show that mineral extraction increases the students' likelihood of enrolling in postsecondary technical education. On the other hand, we document a rise in the likelihood of dropping out of college, especially in leaving a four-year professional degree program. Further analysis reveals that students dropping out come primarily from public high schools generally associated with low-income groups. An exploration of different mechanisms suggests that increasing the opportunity cost of higher education in areas with mineral extraction may drive the results. Our findings constitute strong evidence that natural resources may severely affect human capital accumulation in areas with mineral extraction, particularly among low-income groups.