Reducing Poverty and Natural Resource Degradation Through Human Capital Accumulation

Abstract

This study examines the role of human capital accumulation in reducing poverty and natural resource degradation by using data of 26 Indian states for the time period 1993 to 2011. For this purpose, we extend the model developed by Ikefuji and Horii (2014) as our analytical framework. Unlike Ikefuji and Horii (2014) who developed an overlapping generations model (OLG) in the context of local pollution, we have adapted it in the context of renewable natural resources. As the main result of our theoretical analysis, we find that an investment in education will increase consumption, income or reduce poverty and natural resource degradation. Based on empirical estimation, we find that natural resource conservation will increase poverty. We also find that increase in education of the individual will reduce natural resource degradation and poverty depending on the indicator used to measure it. The primary classes education will reduce natural resource degradation. Whereas higher level of education as measured by sixth to twelfth classes will reduce poverty. In theory school education makes the students aware of environmental concerns, thereby making them aware of the impact their choices likely to have on environment.