Human Capital, Resource Constraints and Intergenerational Fairness

Valente, Simone

doi:10.2139/ssrn.996783

Cited by 2 publications

(3 citation statements)

References 33 publications

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“…She shows that, when bequests are low (either because of low levels of altruism or because of policy), then policies that direct transfers to the current generation lead to lower savings and investment and, ultimately, a "resource curse" (Sachs and Warner 2001). Valente (2007) develops an overlapping generations model that incorporates two features. First, human capital is a substitute for natural resources in production; second, there are intergenerational spillovers in human capital.…”

Section: Box 22 Modeling Natural Resources and Human Capital Across mentioning

confidence: 99%

“…According to the model, if the discount rate is relatively low (that is, the welfare of future generations matters a lot to the social planner), the optimal strategy is to invest heavily in human capital and to extract the natural resource at a slow pace. In the words of Valente (2007), "Knowledge formation and resource preservation are thus complementary targets. " Araji and Mohtadi (2014) model the situation in which natural resource rents are distributed to individuals as lump-sum transfers.…”

Section: Box 22 Modeling Natural Resources and Human Capital Across mentioning

confidence: 99%

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An Economic Rationale for Investing in Human Capital

Brière¹,

Filmer²,

Ringold³

et al. 2017

From Mines and Wells to Well-Built Minds: Turning Sub-Saharan Africa's Natural Resource Wealth Into Human Capital

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There are compelling economic arguments for governments to invest in the human capital of their people-limited access to credit narrows household choices, information failures distort investments, and spillover effects lead to suboptimal family investments. Lack of access to capital is one reason for governments to invest little in human capital-a problem that natural resource revenues can help to overcome. Investing in human capital should be an important part of the portfolio of investments using resource revenues-along with investing in infrastructure and saving through mechanisms, such as sovereign wealth funds, that allow countries to earn international rates of return on investments. A balanced portfolio is desirable, and investing in human capital has a special role to play in resource-rich settings-especially in poor countries-where the need for human capital and infrastructure investments is large. The indirect effects of enhancing human capital on reducing the incidence and cost of conflict are also a large part of the story. Why Governments Should Invest in Human Capital "Perfect Markets" as a Reference Point When markets are functioning perfectly, households have a full range of choices about how to invest their disposable income. They can use their cash for consumption, savings, investing in education and training, and various other types of spending or investing. Since each type of spending has diminishing benefits, at least eventually, people would adjust their spending so that, as economists put it, the marginal returns are equalized across different types of spending. If markets were "perfect," an additional dollar spent on building human capital would yield the same return as the interest rate obtained through savings. If it were higher, households would increase their spending on skills acquisition (perhaps financed An Economic Rationale for Investing in Human Capital From Mines and Wells to Well-Built Minds •

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Section: Box 22 Modeling Natural Resources and Human Capital Across mentioning

confidence: 99%

Section: Box 22 Modeling Natural Resources and Human Capital Across mentioning

confidence: 99%

An Economic Rationale for Investing in Human Capital

Brière¹,

Filmer²,

Ringold³

et al. 2017

From Mines and Wells to Well-Built Minds: Turning Sub-Saharan Africa's Natural Resource Wealth Into Human Capital

View full text Add to dashboard Cite

show abstract

“…Benchekroun and Withagen, 99 Farnstrand Damsgaard, 100 Gaitan and Roe, 101 Groth and Schou 102 develop models that explore the influence of natural resources on economic system development from macroeconomic perspectives. Bravo-Ortega and De Gregorio, 103 Valente, 104 and Neustroev 105 examine the influences of human capital and natural resources on economic development.…”

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confidence: 99%

Translating the extractive resources to economic growth and transformation

Kararach¹

2017

J. Sustain Dev Law Policy

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Most African countries are heavily endowed with natural resources. This gives the continent both the potential for, and threat to, growth/development. Natural resources yield "rents," or profits from their production, which are crucial for resource-led development. The literature on the "rentier state" and how resource rents interact with institutions and political economy dynamics shows that rent flows through the socio-economic system influence development outcomes. Although the natural resources sector provides significant opportunities for the near term, it also does have significant risks for future generations, and the costs and benefits of resource extraction are seldom borne equitably. Ensuring social equity is a major challenge in natural resource governance, generally falling to governments to referee trade-offs and protect the most vulnerable, including current and future generations. It is critical, therefore, for the continent to address itself to important policy questions to ensure that natural resources are a boon for Africa's sustainable growth

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Human Capital, Resource Constraints and Intergenerational Fairness

Cited by 2 publications

References 33 publications

An Economic Rationale for Investing in Human Capital

An Economic Rationale for Investing in Human Capital

Translating the extractive resources to economic growth and transformation

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