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Productivity, Safety, and Regulation in Underground Coal Mining: Evidence from Disasters and Fatalities

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  • Gautam Gowrisankaran
  • Charles He
  • Eric A. Lutz
  • Jefferey L. Burgess

Abstract

Underground coal mining is a dangerous industry where the regulatory state may impose tradeoffs between productivity and safety. We recover the marginal tradeoffs using disasters near a mine as shocks that increase future accident costs. We find that in the second year after a disaster, productivity decreases 11% and accident rates decrease 18-80% for mines in the same state, with some evidence that the number of managers increases. Using published “value of statistical life” and injury cost estimates, we find that the productivity loss following a disaster in the same state costs 2.51 times the value of the safety increases.

Suggested Citation

  • Gautam Gowrisankaran & Charles He & Eric A. Lutz & Jefferey L. Burgess, 2015. "Productivity, Safety, and Regulation in Underground Coal Mining: Evidence from Disasters and Fatalities," NBER Working Papers 21129, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:21129
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    References listed on IDEAS

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    Cited by:

    1. Brett Watson & Ian Lange & Joshua Linn, 2023. "Coal demand, market forces, and U.S. coal mine closures," Economic Inquiry, Western Economic Association International, vol. 61(1), pages 35-57, January.
    2. Michael Gmeiner & Robert Gmeiner, 2022. "Regulation Enforcement," Journal of Labor Research, Springer, vol. 43(2), pages 163-202, June.
    3. Xu, Gang & Wang, Xue & Wang, Ruiting & Yano, Go & Zou, Rong, 2021. "Anti-corruption, safety compliance and coal mine deaths: Evidence from China," Journal of Economic Behavior & Organization, Elsevier, vol. 188(C), pages 458-488.

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    More about this item

    JEL classification:

    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • J28 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Safety; Job Satisfaction; Related Public Policy
    • L72 - Industrial Organization - - Industry Studies: Primary Products and Construction - - - Mining, Extraction, and Refining: Other Nonrenewable Resources

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