Why abundant coal may have ‘cursed’ the Appalachian economy [View all]

The Washington Post
Why abundant coal may have ‘cursed’ the Appalachian economy
Is coal country suffering from what economists call the 'resource curse'?
By Ryan McCarthy
August 27, 2014

As Chico Harlan writes, the economy of the central Appalachian region has been tied to the highs and lows of the coal industry for decades.

Harlan’s piece raises the question of whether West Virginia miners are better off moving away from the troubled local coal mining industry — and certainly some are trying. But is West Virginia’s economy better off moving away from one of its most valuable natural resources? In economics, there’s a fairly sizable body of research on the idea of a “resource curse” — that is, the theory that countries blessed with abundant natural resources are often cursed with higher poverty levels and lower growth. Experts disagree about the extent of the causal link between resource booms and poverty.

Here’s a look at poverty levels in Appalachia from 2008-2012, via the Appalachian Regional Commission. Much of the areas with the highest levels of poverty and lower incomes are clustered around the coal-heavy regions of central Appalachia: (view map at link below)...

... Prior to 2000, the Ohio State authors found, higher rates of poverty were associated with Appalachian coal mining. After 2000, however, the authors found no statistical relationship between poverty and coal employment. Outside of Appalachia, the study’s authors found, coal mining is generally correlated with lower poverty, which suggests there may have been something specific about Appalachia’s coal industry that hurt its overall economy....

MORE at http://www.washingtonpost.com/news/storyline/wp/2014/08/27/coal-and-the-resource-curse/