Editing Resource curse (section)

=== Human capital ===
Another possible effect of the resource curse is the crowding out of [[human capital]]; countries that rely on natural resource exports may tend to neglect education because they see no immediate need for it. Resource-poor economies like [[Singapore]], [[Taiwan]] or [[South Korea]], by contrast, spent enormous efforts on education, and this contributed in part to their economic success (see [[East Asian Tigers]]). Other researchers, however, dispute this conclusion; they argue that natural resources generate easily taxable rents that can result in increased spending on education.<ref>{{cite journal|last=Stijns|first =Jean-Philippe |date=2006 |title=Natural resource abundance and human capital accumulation |doi=10.1016/j.worlddev.2005.11.005 |volume=34 |issue=6 |journal=World Development |pages=1060–1083 |citeseerx=10.1.1.197.1418 }}</ref> However, the evidence for whether this increased spending translates to better education outcomes is mixed. A study on [[Brazil]] found that oil revenues were associated with sizable increases in education spending, but only with small improvements in education provision.<ref>{{cite journal|last1=Caselli|first1 =Francesco|last2=Michaels|first2=Guy|date=2013 |title=Do Oil Windfalls Improve Living Standards? Evidence from Brazil|doi=10.1257/app.5.1.208 |volume=5|pages=208–238|journal=American Economic Journal: Applied Economics|s2cid =1137888|url =http://cep.lse.ac.uk/pubs/download/dp0960.pdf}}</ref> Similarly, an analysis of early-20th century [[Texas oil boom|oil booms]] in [[Texas]] and neighboring states found no effect of oil discoveries on student teacher ratios or school attendance. However, oil-rich regions participated more intensively in the [[Rosenwald School|Rosenwald schoolbuilding program]].<ref>{{cite journal|last=Maurer|first =Stephan |date=2019 |title=Oil discoveries and education provision in the Postbellum South |doi=10.1016/j.econedurev.2019.101925 |volume=73 |journal=Economics of Education Review|page =101925 |s2cid =204420629 }}</ref> A 2021 study found that European regions with a history of coal mining had 10% smaller per-capita GDP than comparable regions. The authors attribute this to lower investments in human capital.<ref>{{Cite journal|last1=Esposito|first1=Elena|last2=Abramson|first2=Scott F.|date=2021-03-04|title=The European coal curse|journal=Journal of Economic Growth|volume=26|issue=1 |pages=77–112|language=en|doi=10.1007/s10887-021-09187-w|issn=1573-7020|doi-access=free|bibcode=2021JEcGr..26...77E }}</ref>

Resource extraction driven economies can be argued to potentially have negative effects on human capital through several different means. "Addictive economies" is a term that was coined by William Freudenburg to describe how resource extraction driven economies can lead to short term economic benefits and sometimes short-sightedness by policymakers. Freudenberg also did research in an effort to understand more of the human capital implications of these types of economies and why results vary so widely across regions and industries. Although there is plentiful research of these types of economies, an understanding of the socioeconomic effects are still murky. Researchers Robert Purdue and Gregory Pavela did research on the [[West Virginia]] coal mining economy to further investigate these concerns. Their research includes data from all of West Virginia's 55 counties over the 13-year period from 1997 to 2009. In this research, significant ecological costs can be noted in the area which, in turn, effect the people negatively. The research also poses the fact that West Virginia ranked last on the Gallup-Healthways Well-Being Index in the years of 2009-2010 in the categories of "physical health", "emotional health", "life evaluation", and "overall well-being". Arguments against the "resource curse" often claim economic benefits from the resource. The Purdue and Pavela case study reflects an example of negative economic impacts of this type of reliance on resource extraction; as even when the price of surface level coal goes up on the market, the poverty levels of people within those communities rises alongside it.<ref>Perdue, R. and G. Pavela. 2012.  Addictive Economies and Coal Dependency: Methods of Extraction and

                 Socioeconomic Outcomes in West Virginia 1997-2009. ''Organization and Environment.''

                 25(4): 368-384.</ref>

Adverse effects of natural resources on human capital formation might come through several channels. High wages in the resource extraction industry could induce young workers to drop out of school earlier in order to find employment. Evidence for this has been found for coal<ref>{{Cite journal|last1=Black|first1=Dan|author2-link=Terra McKinnish|last2=McKinnish|first2=Terra|last3=Sanders|first3=Seth|date=2021-06-07|title=Tight Labor Markets and the Demand for Education: Evidence from the Coal Boom and Bust |journal=Industrial and Labor Relations Review|volume=59|pages=3–16|language=en|doi=10.1177/001979390505900101|hdl=10161/2535|s2cid=15175248|hdl-access=free}}</ref> and [[fracking]] booms.<ref>{{Cite journal|last1=Cascio|first1=Elizabeth|last2=Narayan|first2=Ayushi|date=2021-06-07|title=Who Needs a Fracking Education? The Educational Response to Low-Skill-Biased Technological Change|journal=Industrial and Labor Relations Review|volume=75|pages=56–89|language=en|doi=10.1177/0019793920947422|s2cid=225246974|url=http://www.nber.org/papers/w21359.pdf }}</ref> In addition, resource booms can lower the wages of teachers relative to other workers, increasing turnover and impairing students' learning.<ref>{{Cite journal|last1=Marchand|first1=Joseph|last2=Weber|first2=Jeremy |date=2021-06-07|title=How Local Economic Conditions Affect School Finances, Teacher Quality, and Student Achievement: Evidence from the Texas Shale Boom|journal=Journal of Policy Analysis and Management|volume=39|pages=36–63|language=en|doi=10.1177/0019793920947422|s2cid=225246974|url=http://www.nber.org/papers/w21359.pdf }}</ref>