The economic and social benefit of coal mining: the case of regional Queensland

This paper examines economic impacts of coal mining across local government areas (LGAs) in Australia. Three main distinguishing features of this research are a) the analysis through the mining boom and bust cycle, b) a focus on small regional areas within one state in Australia and c) the use of socio-economic indicators in addition to the standard income and employment indicators. An analysis of socio-economic changes in the LGAs during the business cycle provides insights as to how coal mining affects sustainable development of regions in the long run. Focus on one state reduces endogeneity in statistical analyses. The use of various socio-economic indicators helps understanding of the reported negative impacts of mining on local economies. The results show that the coal mining sector creates a spillover effect resulting in an increase in non-mining employment. The income indicators suggest that the coal mining sector creates positive impacts as indicated by the decreased share of lowincome families in the area. However, some potential risks to housing are found since an increase in coal mining employment leads to increased financial stress due to increased rental costs for low-income households.