Human capital and energy consumption: evidence from OECD countries

Yao Yao, Kris Ivanovski, John Inekwe, Russell Smyth

Research output: Contribution to journalArticleResearchpeer-review

Abstract

We examine the effect of human capital on energy consumption for a panel of OECD economies over the period 1965–2014. Our preferred results, which account for cross-sectional dependence and structural breaks, suggest that a one standard deviation increase in human capital reduces aggregate energy consumption by 15.36%. When we distinguish between clean and dirty energy consumption, we find that human capital generates significant positive externalities for the environment. Specifically, we find that a one standard deviation increase in human capital is associated with a 17.33% decrease in dirty energy consumption and an 85.54% increase in clean energy consumption. Our findings reinforce the social benefits of investing in human capital and suggest a promising avenue for energy conservation without impeding economic growth.
Original languageEnglish
Article number104534
Number of pages14
JournalEnergy Economics
Volume84
DOIs
Publication statusPublished - Oct 2019

Keywords

  • Human capital
  • Energy consumption
  • Cross-section dependence
  • Panel data

Cite this

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title = "Human capital and energy consumption: evidence from OECD countries",
abstract = "We examine the effect of human capital on energy consumption for a panel of OECD economies over the period 1965–2014. Our preferred results, which account for cross-sectional dependence and structural breaks, suggest that a one standard deviation increase in human capital reduces aggregate energy consumption by 15.36{\%}. When we distinguish between clean and dirty energy consumption, we find that human capital generates significant positive externalities for the environment. Specifically, we find that a one standard deviation increase in human capital is associated with a 17.33{\%} decrease in dirty energy consumption and an 85.54{\%} increase in clean energy consumption. Our findings reinforce the social benefits of investing in human capital and suggest a promising avenue for energy conservation without impeding economic growth.",
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Human capital and energy consumption : evidence from OECD countries. / Yao, Yao; Ivanovski, Kris; Inekwe, John; Smyth, Russell.

In: Energy Economics, Vol. 84, 104534, 10.2019.

Research output: Contribution to journalArticleResearchpeer-review

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T2 - evidence from OECD countries

AU - Yao, Yao

AU - Ivanovski, Kris

AU - Inekwe, John

AU - Smyth, Russell

PY - 2019/10

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N2 - We examine the effect of human capital on energy consumption for a panel of OECD economies over the period 1965–2014. Our preferred results, which account for cross-sectional dependence and structural breaks, suggest that a one standard deviation increase in human capital reduces aggregate energy consumption by 15.36%. When we distinguish between clean and dirty energy consumption, we find that human capital generates significant positive externalities for the environment. Specifically, we find that a one standard deviation increase in human capital is associated with a 17.33% decrease in dirty energy consumption and an 85.54% increase in clean energy consumption. Our findings reinforce the social benefits of investing in human capital and suggest a promising avenue for energy conservation without impeding economic growth.

AB - We examine the effect of human capital on energy consumption for a panel of OECD economies over the period 1965–2014. Our preferred results, which account for cross-sectional dependence and structural breaks, suggest that a one standard deviation increase in human capital reduces aggregate energy consumption by 15.36%. When we distinguish between clean and dirty energy consumption, we find that human capital generates significant positive externalities for the environment. Specifically, we find that a one standard deviation increase in human capital is associated with a 17.33% decrease in dirty energy consumption and an 85.54% increase in clean energy consumption. Our findings reinforce the social benefits of investing in human capital and suggest a promising avenue for energy conservation without impeding economic growth.

KW - Human capital

KW - Energy consumption

KW - Cross-section dependence

KW - Panel data

U2 - 10.1016/j.eneco.2019.104534

DO - 10.1016/j.eneco.2019.104534

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JO - Energy Economics

JF - Energy Economics

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