The effect of restructuring on US coal mining labor productivity, 1980–1995

Abstract

From 1980 to 1995, labor productivity in US coal mining almost tripled due to heightened competition, improved labor relations, scale economies, technological change, chronic oversupply, and industry restructuring that halved the number of mines. This paper uses EIA-7A data to analyze the hypothesis that productivity growth may have been caused by closure of small inefficient mines rather than improvement of existing mines, which if true could signal slower future growth. The hypothesis is evaluated using descriptive statistics and histograms of productivity over time, and by analyzing productivity for subsets of mines based on their longevity — including a subset of continuously operating mines unchanged by mine closures. Both methods strongly indicate that productivity growth has not just been the result of attrition of low-productivity mines or an artifact of the shift of production to high-productivity western surface mines. Rather, the evidence shows that in most regions and for most mining methods, both continually existing and new mines have improved steadily. Other factors are discussed, but continued productivity improvement is expected.