PRODUCTIVITY, SAFETY, AND REGULATION IN COAL MINING: EVIDENCE FROM DISASTERS AND FATALITIES

Coal mining is a dangerous occupation where safety is an important output. Fatalities and disasters may change future accident costs at or near a mine. We use this variation to understand the tradeoffs between mineral output and safety. We find that government inspections and penalties increase after fatalities and less-severe accident rates decrease by 10%. For mines in the state of a disaster, less-severe accident rates decrease by 23%, and fatalities by 68%, representing up to $2 per hour worked, with limited evidence that mineral productivity falls up to $14 per hour worked and that managers employed increases by 11%.Institutional subscribers to the NBER working paper series, and residents of developing countries may download this paper without additional charge at www.nber.org.

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