Human capital and energy consumption: evidence from OECD countries

Yao Yao, Kris Ivanovski, John Inekwe, Russell Smyth

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218 Citations (Scopus)


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
Publication statusPublished - Oct 2019


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

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