The effect of human capital on energy consumption: Evidence from an extended version of STIRPAT framework

Abstract

Human capital is an important aspect of energy consumption, exerting crucial effects on economic growth, technological progress, and economic restructuring. This paper presents an in-depth investigation of the effect of human capital on energy consumption using an extended version of the Stochastic Impacts by Regression on Population, Affluence, and Technology framework. The estimated results using a panel dataset covering China’s 30 provincial regions during the period 1997–2018 and applying fixed effects with instrumental variables and the generalized method of moments indicated that an increase in human capital significantly drove energy consumption. A 1% increase in human capital increased energy consumption by approximately 0.3%. A two-step channel analysis to test scale, technical, and structural effects revealed that the positive effect of human capital on energy consumption is based primarily on the scale effect. However, highly educated human capital alleviates the energy pressure of this effect. In contrast to the scale effect, both the technical and structural effects of human capital reduced energy consumption, and this reduction is primarily correlated with enterprises’ utility-oriented technological progress. Finally, we present strategic energy control policy implications related to human capital.