IRES, Université Catholique de Louvain and Nova School of Business and Economics (Universidade Nova de Lisboa)
Working Paper No 1904
What is the relationship between climate change and human capital ac- cumulation? Through which mechanisms do weather changes affect tertiary educational attainment in African economies? This paper investigates the potential link between climate change and high-skilled human capital for- mation in Africa. In order to do so, a two-sector, world economy model that endogenizes education decisions and internal migration decisions is devel- oped. This stylized model predicts that negative climatic conditions increase the share of people moving internally from rural to urban areas. This in turn leads to a larger future share of individuals investing in tertiary educa- tion, because the access and returns to education are higher in urban areas. These theoretical predictions are empirically validated by a panel data anal- ysis at the country level, and a cross-sectional data analysis at the province level. The panel data set includes 37 African countries and covers the time period between 1960 and 2010. The cross-sectional data set includes 111 provinces in 17 African economies. A linear regression analysis shows that weather changes and educational attainment are correlated. A Two-Stage least squares regression analysis indicates that this effect results from the impact of climatic variation on internal migration. The research leads to the conclusion that adverse weather changes may have the unexpected effect of increasing high-skilled educational attainment in African economies.