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Does oil rents dependency reduce the quality of education?

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  • Mohammad Reza Farzanegan

    (Philipps-Universität Marburg
    CESifo)

  • Marcel Thum

    (Technische Universität Dresden
    ifo Dresden)

Abstract

The resource curse hypothesis suggests that resource-rich countries (especially oil-dependent economies) show lower economic growth rate as compared to resource-poor countries. We contribute to this literature by providing empirical evidence on a new transmission channel of the resource curse, namely the negative long-run effect of oil rents on the quality of education. Our empirical analysis for more than 70 countries from the period of 1995–2015 shows a significantly positive effect of oil rents on the quantity of education measured by government spending on primary and secondary education. However, we find a robust and negative long-run effect of oil rents dependency on the objective and subjective indicators of quality of education. Further, panel regressions with country and year fixed effects support our cross-country findings on the negative effect of oil rents dependency on the quality of education.

Suggested Citation

  • Mohammad Reza Farzanegan & Marcel Thum, 2020. "Does oil rents dependency reduce the quality of education?," Empirical Economics, Springer, vol. 58(4), pages 1863-1911, April.
    • Handle: RePEc:spr:empeco:v:58:y:2020:i:4:d:10.1007_s00181-018-1548-y
    DOI: 10.1007/s00181-018-1548-y
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    4. Iman Cheratian & Mohammad Reza Farzanegan & Saleh Goltabar, 2019. "Oil Price Shocks and Unemployment Rate: New Evidence from the MENA Region," MAGKS Papers on Economics 201931, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).
    5. Issaka Dialga & Youmanli Ouoba, 2022. "How do extractive resources affect human development ? Evidence from a panel data analysis," Post-Print hal-04467781, HAL.
    6. Chen, Yufeng & Khurshid, Adnan & Rauf, Abdur & Yang, Hanyao & Calin, Adrian Cantemir, 2023. "Natural resource endowment and human development: Contemporary role of governance," Resources Policy, Elsevier, vol. 81(C).
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    8. Mohammad Reza Farzanegan, 2021. "The Effect of Public Corruption on Covid-19 Fatality Rate: A Cross-Country Examination," CESifo Working Paper Series 8938, CESifo.
    9. Mohammad Reza Farzanegan & Reza Zamani, 2023. "Does Oil Corrupt? Evidence from a Multivariate VAR in Iran," MAGKS Papers on Economics 202321, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).
    10. Iman Cheratian & Saleh Goltabar & Hassan Gholipour Fereidouni & Mohammad Reza Farzanegan, 2023. "External Financing and Firm Growth: Evidence from Micro, Small, and Medium Enterprises in Iran," MAGKS Papers on Economics 202308, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).
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    12. Suzanna Elmassah & Eslam A. Hassanein, 2022. "Can the Resource Curse for Well-Being Be Morphed into a Blessing? Investigating the Moderating Role of Environmental Quality, Governance, and Human Capital," Sustainability, MDPI, vol. 14(22), pages 1-21, November.
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