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Reversing environmental deterioration: the role of human capital in developing countries

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Abstract

Mitigating environmental deterioration and curbing CO2 emissions has moved center stage in policy debate and academic research. Employing data from 14 developing countries with a large share of carbon emissions at a global scale, we examine the effect of human capital on environmental deterioration over the period 1980 to 2019. We account for human capital by focusing on current education expenditure to offer a better insight into the role of policy making in averting environmental deterioration in developing countries. Results show that human capital advancement is robustly associated with reductions in CO2 emissions. We additionally provide a comprehensive analysis of the human capital-environmental deterioration nexus along the conditional distribution by employing the Machado and Silva (J Econom 213(1):145–173, 2019) estimation method of quantile regressions with fixed effects. Human capital is affecting CO2 emissions negatively and statistically significantly across the distribution, except for the upper tail.

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Notes

  1. The 14 developing countries considered are: Brazil, Chile, China, Colombia, Czech Republic, Hungary, India, Indonesia, Malaysia, Mexico, Russia, South Africa, Turkey and Vietnam.

  2. Experimenting with alternative measures of human capital, such as school enrollment, yields qualitatively similar results.

  3. The same estimation procedure is followed for CO2 emissions as the dependent variable.

  4. Population growth can take negative values.

  5. Tests report no evidence of cross-sectional dependence and/or slope heterogeneity.

  6. Wald x2 tests return a zero significance level at the mean, so we can strongly reject the null hypothesis that all of the regression coefficients are simultaneously equal to zero.

  7. School enrollment in tertiary education as a percentage of gross enrollment ratio is employed as an alternative proxy for human capital (senroll).

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Funding

The study represents original material that has not been published elsewhere. The authors have no relevant financial or non-financial interests to disclose. No funding was received for conducting this study.

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Authors and Affiliations

  1. George Washington University, Washington, DC, USA

    Anastasia Chondrogianni

  2. National and Kapodistrian University of Athens, Athens, Greece

    Pinelopi Tsalaporta

  3. Economic Analysis and Research Department, Bank of Greece, 21 El. Venizelou Avenue, 102 50, Athens, Greece

    Pinelopi Tsalaporta

Authors
  1. Anastasia Chondrogianni
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  2. Pinelopi Tsalaporta
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Correspondence to Pinelopi Tsalaporta.

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Chondrogianni, A., Tsalaporta, P. Reversing environmental deterioration: the role of human capital in developing countries. Econ Change Restruct 56, 1585–1599 (2023). https://doi.org/10.1007/s10644-022-09475-4

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