Promoting clean air, beaches can boost economic growth: Study
Washington D.C. [USA], Mar. 29 : A study finds that preserving and promoting natural amenities - clean air, hiking trails, beaches - and quality of life may give a double shot boost to economic growth important for human capital.According to researchers, places with improving quality of life may attract educated people and if there is more human capital in an area with better amenities, then it gives growth an additional boost.
The share of college graduates -- often referred to as human capital -- and the quality of life in a community were found to significantly contribute to economic growth, said Stephan Goetz from Penn State University in the US.
"We've always known that human capital is important for economic growth and we are also learning that counties that have good amenities and quality of life -- mountain views, lakes, shores, and clean environment -- are doing quite well. But, we haven't looked at having both of these together in a county at the same time and what the policy implications might be," Goetz added.
The findings, published in journal of Applied Economics, indicated that both quality of life -- including amenities such as clean air, hiking trails, beaches and a temperate climate -- and the number of college-educated citizens can positively affect wage growth.
"If you attract educated individuals they may want to influence environmental policy, or find ways to improve the local quality of life, thus reinforcing the effects of quality of life on economic growth," Goetz explained.
Communities may want to take advantage of the combined effect of human capital and natural amenities to create programs that attract and retain college graduates and improve the environment, said study co-author Qin Fan from California State University, Fresno.
"Our study suggests that the effect of human capital on economic growth is larger in high-quality-of-life counties -- natural amenities such as clean air and temperate climate, could potentially attract human capital and perhaps increase labor productivity, thus boosting the effect of human capital on growth," Fan explained.
"Our results provide empirical support for community development strategies through preserving or promoting natural amenities that improve quality of life and retain human capital."
While communities often use tax breaks to attract business, the researchers suggest that instead reinvesting some of that money into infrastructure and natural enhancements may attract entrepreneurs and business owners.