Productivity, Safety, and Regulation in Coal Mining: Evidence from Disasters and Fatalities

Coal mining is a dangerous occupation where costly fatalities and disasters may increase future accident costs. We use occurrences of deaths as shocks that affect the tradeoff 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 a disaster-affected state, less-severe accident rates decrease by 23%, and fatalities by 68%, saving up to $2 per hour in accident costs, with limited evidence suggesting that mineral productivity falls by 7%, or $14 per worker hour, and that the number of managers employed increases by 11%.