The impact of mining patents on public education: evidence for mining municipalities in Chile

Produced by: 
Universidad Católica de Chile
Available from: 
August 2017
Paper author(s): 
Mauricio Oyarzo
Dusan Paredes
Education - Health

Chilean mining municipalities collect a mineral tax to compensate the negative externalities associated with resource extraction. This collection implies a positive marginal impact on local finance to improve the quality of life in the mining communities. However, there is not enough empirical evidence to support this causal mechanism. This article contributes to cover this knowledge gap with a unique experimental framework proposed by the Chilean tax system. Mining law indicates that municipalities above an exogenous threshold are able to keep this extra income. We use this Regression Discontinuity Design to identify the causal effect in public education indicators of the mining communities. Our results show that the mining municipalities these have a worse educational performance. In addition, the levels of spending in public education are not significant, which accounts for the disadvantaged position in relation to the high dependence on extractive activities.


Research section: 
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