Human Capital, Resource Constraints and Intergenerational Fairness

Abstract

This paper studies an endogenous growth model with human capital, exhaustible resources, and overlapping generations. Under laissez-faire, higher study time reduces depletion rates by increasing the share of re-sources that present generations are willing to sell to successors. However,selfish behavior may prevent competitive sustained growth, and implementing utilitarian allocations generally induces optimal-and sustainable paths. It is shown that: (i) raising study time and decreasing resource depletion are always complementary targets in optimal policies; (ii) growth effects are stronger the lower the optimal share of exploited resources; (iii) generational welfare gains from optimal policies are delayed by faster depletion and, contrary to intuition, anticipated by lower social discount rates.

Keywords: Endogenous Growth, Exhaustible Resources, Human Capital, Overlapping Generations, Intergenerational Fairness, Sustainability

JEL Classification: O11, J24, Q32