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Coal Mining, Economic Development, and the Natural Resource Curse

Michael Betz (), Michael Farren (), Linda Lobao and Mark Partridge

MPRA Paper from University Library of Munich, Germany

Abstract: Coal mining has a long legacy of providing needed jobs in isolated communities but it is also associated with places that suffer from high poverty and weaker long-term economic growth. Yet, the industry has greatly changed in recent decades. Regulations, first on air, have altered the geography of coal mining, pushing it west from Appalachia. Likewise, technological change has reduced labor demand and has led to relatively new mining practices such as invasive mountain-top approaches. Thus, the economic footprint of coal mining has greatly changed in an era when the industry appears to be on the decline. This study investigates whether these changes along with coal’s “boom/bust” cycles have affected economic prosperity in coal country. We separately examine the Appalachian region from the rest of the U.S. due to Appalachia’s unique history and different mining practices. Our study takes a new look at the industry by assessing the winners and losers of coal development around a range of economic indicators and addressing whether the natural resources curse applies to contemporary American coal communities today. The results suggest that modern coal mining has rather nuanced effects that differ between Appalachia and the rest of the U.S. We do not find strong evidence of a resources curse, except that coal mining has a consistent inverse association with measures linked to population growth and entrepreneurship, and thereby future economic growth.

Keywords: Coal; Economic Development; Regional Labor Markets (search for similar items in EconPapers)
JEL-codes: O10 O13 R23 (search for similar items in EconPapers)
Date: 2014-08-09
New Economics Papers: this item is included in nep-geo, nep-gro and nep-lma
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Journal Article: Coal mining, economic development, and the natural resources curse (2015) Downloads
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