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 implement- ing 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) gener- ational welfare gains from optimal policies are delayed by faster depletion and, contrary to intuition, anticipated by lower social discount rates.Endogenous Growth, Exhaustible Resources, Human Capital, Over- lapping Generations, Intergenerational Fairness, Sustainability