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An empirical analysis on the relationship between resource rents and education: the role of institutional quality thresholds

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  • Soran Mohtadi

    (Johns Hopkins University
    Universidad Autónoma de Barcelona)

Abstract

This paper investigates the impact of resource rents, specifically those from oil and gas, on education, with a focus on the role of institutional quality. Using a sample of 103 countries and a panel data analysis covering the period 1984–2020, the paper employs econometric threshold analysis to classify countries based on their institutional quality. The results indicate that in countries with weaker institutions, oil and gas rents have a negative impact on education levels. However, in countries with stronger institutions, the impact of resource rents on education is positive and significant. By adopting the threshold regression model, which considers the concept of threshold effects, this study contributes to the existing literature by examining the existence of an institutional quality threshold that captures the rich dynamics between resource rents and education. These findings have important policy implications, highlighting the heterogeneity in the role of resource rents in the economy, depending on the quality of political institutions.

Suggested Citation

  • Soran Mohtadi, 2023. "An empirical analysis on the relationship between resource rents and education: the role of institutional quality thresholds," International Review of Economics, Springer;Happiness Economics and Interpersonal Relations (HEIRS), vol. 70(2), pages 217-236, June.
    • Handle: RePEc:spr:inrvec:v:70:y:2023:i:2:d:10.1007_s12232-023-00416-9
    DOI: 10.1007/s12232-023-00416-9
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    More about this item

    Keywords

    Oil and gas rents; Education; Institutional quality; Threshold effects;
    All these keywords.

    JEL classification:

    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • I25 - Health, Education, and Welfare - - Education - - - Education and Economic Development
    • C24 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Truncated and Censored Models; Switching Regression Models; Threshold Regression Models

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