The Local Economic Impact of Coal Mine Closures

David Nason, Adam Scavette and Heather Stephens

No 26-30, Working Papers from Federal Reserve Bank of Philadelphia

Abstract: Falling natural gas prices amid the shale boom triggered a sharp decline in U.S. coal production, with over half of Appalachian mines shuttering between 2011 and 2016. In this paper, we use administrative data on mine activity and employment to measure the impact of coal mine closures on local economic outcomes. Using difference-in-differences, we find these closures significantly increased local unemployment and reduced jobs, wages, and output. We estimate a job loss multiplier of 2.0—substantially higher than in previous busts—likely driven by a rising local wage premium that amplified the impact of each lost mining job on the broader regional economy.

Keywords: Coal; Labor Demand; Energy Transition; Natural Resource Shock (search for similar items in EconPapers)
JEL-codes: Q31 Q32 Q33 R11 R12 (search for similar items in EconPapers)
Pages: 29
Date: 2026-06-24
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Persistent link: https://EconPapers.repec.org/RePEc:fip:fedpwp:103422

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DOI: 10.21799/frbp.wp.2026.30

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