Coal Mining and the Resource Curse in the Eastern United States

We measure the effect of coal resource sector dependence on long run income growth using the natural experiment of coal mining in 409 U.S. counties that are selected for homogeneity. Using a panel data set (1970-2010), we find a one standard deviation increase in resource dependence is associated with an estimated 0.6 percentage point drop in annual growth rates of per capita personal income. We also measure the extent to which the resource curse operates through disincentives to education, and find significant effects, but results indicate that this education channel explains only perhaps 25% of the curse.