Econometric analysis of regional labour productivity in US coal mines: 1950-1975

Changes in labour productivity can bring about economic growth or decline of a region. The factors that explain increases or decreases in labour productivity, if identified, can help policy makers control them so as to mitigate explosive changes in productivity and their concomitant effects on the utilisation of capital, employment, prices, welfare payments and social services. This paper attempts to identify these variables for five coal-producing regions in the US. Section 2 describes these regions, identifies the relevant variables and presents an econometric methodology of regression equations for underground and surface mines. These variables are the non-captive mines, continuous mining technologies in underground mines and medium- and large-sized power shovels and draglines in surface mines, capacity utilisation, accident rates and mining regulations. The literature on regional labour productivity is critically reviewed in Section 3 and it is concluded that none of the five available studies help in comparing inter-regional productivity of labour. Section 4 presents empirical results of equations estimated for underground and surface mines and concludes that the selected variables explained variation in labour productivity significantly. In particular, the results revealed that the regional variations in productivity were explained by technological changes, mine ownership and regulatory laws passed by the Federal and the State governments.