Natural resource rent and Human Capital Accumulation

In this research, the relationship between total naturalresource abundance and indicator of human capital(education and health) has been studied. Estimating asystem of multiple linear regression models in 2010 andby using ordinary least squares (OLS) for a crosssection of 47 RGI ranked countries, we find significantevidence that natural resource abundance, in most ofthe cases, crowds-out human capital negatively. Themodel with three set of the dependent variablesidentified to have heteroscedasticity, however, has nosign of self-autocorrelation and auto collinearity.Nonetheless, among all models, only one, with adependent variable of public expenditure (percentageof total health expenditure) showed a positive andstrong relationship with resource abundance. Thismodel, moreover, has homoscedasticity and we can saythat the error terms have constant variance.

Keywords:

Human capital accumulation , Natural resource rent , resource curse , Education , Health