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Economic Opportunities and Human Capital Investments: Evidence from Artisanal Gold Mining in Africa

Author

Listed:
  • Ghazarian, Avenia

    (Mistra Center for Sustainable Markets (Misum))

  • Khan, Akib

    (Uppsala University)

Abstract

How does human capital investment respond to local economic opportunities? Income gains can increase the demand for schooling while new jobs raise the opportunity costs. We investigate this question in the context of rapid growth in artisanal gold mining in sub-Saharan Africa. We compile 45 waves of Demographic and Health Surveys covering 1.3 million individuals from 14 countries in this region. Identification comes from two sources of variation: one in the global gold price and the other in the exposure of households to places that are geologically suitable for artisanal gold mining. We find that a near-tripling of the global gold price – reflecting changes between 2005 and 2010 – leads to a decline in school attendance: by 3.1 pp for 11 to 15-year-olds and by 2.3 pp for 16 to 20-year-olds who live near gold-suitable areas. These reductions are higher for boys. Taken together, these results highlight the potential costs of economic development driven by natural resources.

Suggested Citation

  • Ghazarian, Avenia & Khan, Akib, 2023. "Economic Opportunities and Human Capital Investments: Evidence from Artisanal Gold Mining in Africa," Misum Working Paper Series 2023-14, Stockholm School of Economics, Mistra Center for Sustainable Markets (Misum), revised 12 Nov 2024.
    • Handle: RePEc:hhs:hamisu:2023_014
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    References listed on IDEAS

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    More about this item

    Keywords

    Human capital investment; Economic opportunities; Artisanal mining; Gold; Africa;
    All these keywords.

    JEL classification:

    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • Q32 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Exhaustible Resources and Economic Development

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