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The Local Economic Impact of Coal Mine Closures

Author

Listed:
  • David Nason
  • Adam Scavette
  • Heather Stephens

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.

Suggested Citation

  • David Nason & Adam Scavette & Heather Stephens, 2026. "The Local Economic Impact of Coal Mine Closures," Working Papers 26-30, Federal Reserve Bank of Philadelphia.
    • Handle: RePEc:fip:fedpwp:103422
    DOI: 10.21799/frbp.wp.2026.30
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    File URL: https://www.philadelphiafed.org/-/media/FRBP/Assets/working-papers/2026/wp26-30.pdf
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    JEL classification:

    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
    • Q31 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Demand and Supply; Prices
    • Q32 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Exhaustible Resources and Economic Development
    • Q33 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Resource Booms (Dutch Disease)

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