Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/259366 
Year of Publication: 
2022
Series/Report no.: 
WIDER Working Paper No. 2022/10
Publisher: 
The United Nations University World Institute for Development Economics Research (UNU-WIDER), Helsinki
Abstract: 
Extractive industries form an important part of the economy for many developing countries, but their impact on growth and welfare remains understudied. With global efforts to transition to net-zero carbon emissions in the coming decades, understanding the local impacts of the extractives sector is crucially important for regional economic development policy in the management of this transition. In this paper we use tax administrative data from South Africa to examine the local spillovers from mining activities, focusing on wages, firm profitability, and job creation. Utilizing exogenous changes in international mineral and metals prices, which had a heterogeneous impact across different local areas depending on the main minerals and metals being extracted, we find that, in the short term, a general contraction in the mining sector reduces the number of jobs in related service industries, as well as the wages received by local workers in those sectors. We also find evidence that a negative shock to the mining sector through vertical integration will have negative productivity impacts on the tradable sectors (especially manufacturing).
Subjects: 
mining
South Africa
local spillovers
firms
profitability
JEL: 
L72
O13
Q32
R11
Persistent Identifier of the first edition: 
ISBN: 
978-92-9267-141-9
Document Type: 
Working Paper

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