Abstract
Ghana is experiencing its third gold rush, and this paper sheds light on the socioeconomic impacts of this rapid expansion in industrial production. Using a rich dataset consisting of geocoded household data combined with detailed information on gold mining activities, we conduct two types of difference-in-differences estimations that provide complementary evidence. The first is a local-level analysis that identifies an economic footprint area very close to a mine, and the second is a district-level analysis that captures the fiscal channel. The results indicate that men are more likely to benefit from direct employment as miners compared to men further away, and that women in mining communities may more likely gain from indirect employment opportunities and earn cash for work. We also find that infant mortality rates decrease significantly in mining communities, compared to the evolution in communities further away.
Highlights
The mining sector in Africa is growing rapidly and is the main recipient of foreign direct investment (World Bank 2011)
This means that any differences in effects across district and local analysis should not be interpreted as inconsistencies, but rather as differential and additional impacts. 5.1 Individual-level difference-in-differences strategy In a difference-in-differences setting, it is important that the sample is balanced, assuming that the treatment and control groups are on similar trajectories
Ghana has a long history of gold production and is experiencing its third gold rush, during which annual gold production has skyrocketed
Summary
The mining sector in Africa is growing rapidly and is the main recipient of foreign direct investment (World Bank 2011). Kotsadam and Tolonen (2014) use DHS data from Africa, and find that mine openings cause women to shift from agriculture to service production and that women become more likely to work for cash and year-round as opposed to seasonally Continuing this analysis, Tolonen (2014) explores the links between mining and female empowerment in eight gold-producing countries in East and West Africa, including Ghana. The mining royalty paid by mining companies in Ghana was 3 percent until 2010, which was the average rate for gold production in Africa (Gajigo, Mutambatsere, and Mdiaya 2012), but increased to 5 percent in 2010 (Standing and Hilson 2013). Road data is an alternative way of defining distance from mines, but time series data on roads is not available
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