Natural Resources, Demand for Skills, and Schooling Choices

52 Pages Posted: 11 Jul 2023

See all articles by Aline Butikofer

Aline Butikofer

NHH Norwegian School of Economics - Department of Economics

Antonio Dalla Zuanna

Bank of Italy

Kjell G. Salvanes

NHH Norwegian School of Economics - Department of Economics; IZA Institute of Labor Economics

Date Written: 2023

Abstract

This paper studies the consequences of the buildup of a new economic sector—the Norwegian petroleum industry—on investment in human capital. We assess both short-term and long-term effects for a broad set of educational margins, by comparing individuals in regions exposed to the new sector with individuals in unexposed regions. Importantly, we analyze how the effects and the mechanisms change as the sector develops. Our results indicate that an initial increase in the high school dropout rate is short-lived both because dropouts get their degrees later as adults, and because later-born cohorts adapt to the new needs of the industry by enrolling more in vocational secondary education. We also observe a decrease in academic high school and college enrollment except for engineering degrees. Financial incentives to both completing high school and field of study, are the most likely channels driving these effects.

Keywords: school choice, demand for skills, natural resource sector

JEL Classification: J240, J230, I260, I230

Suggested Citation

Butikofer, Aline and Dalla Zuanna, Antonio and Salvanes, Kjell G., Natural Resources, Demand for Skills, and Schooling Choices (2023). CESifo Working Paper No. 10543, Available at SSRN: https://ssrn.com/abstract=4506329 or http://dx.doi.org/10.2139/ssrn.4506329

Aline Butikofer (Contact Author)

NHH Norwegian School of Economics - Department of Economics ( email )

Helleveien 30
N-5035 Bergen
Norway

Antonio Dalla Zuanna

Bank of Italy ( email )

Via Nazionale 91
Rome, 00184
Italy

Kjell G. Salvanes

NHH Norwegian School of Economics - Department of Economics ( email )

Helleveien 30
N-5035 Bergen
Norway
+47 5 595 9315 (Phone)
+47 5 595 9543 (Fax)

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

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