An empirical examination of the relationship between mining employment and poverty in the Appalachian region

Abstract

We empirically examine the relationship between the share of employment in the mining sector and poverty rates in Appalachian counties of the United States. Using panel data we decompose the effect of an increase in a sector's employment share (i.e. mining, manufacturing, agriculture, services and construction) to identify an immediate and lag effect. With regard to the mining sector the empirical results suggest that the immediate effect reduces poverty rates while the lag effect is associated with increases in the poverty rate. We assess these results in the context of previous literature that examines the relationship between resource intensive economies and economic development.