New research shows positive welfare effects of natural resource extraction in Africa

Ruthless exploitation, environmental disasters and refugees. That is a common narrative of the consequences of the extraction of natural resources in Africa. A new dissertation from the School of Business, Economics and Law at the University of Gothenburg gives a more nuanced picture. Stronger labor market participation for women, more gender equality and halving infant death are also part of the recent expansion of mining in Africa.

“There are, of course, lots of problems with extractive industries – oil, natural gas and mineral mining – in Africa. But I have explored welfare determinants at local level, such as labor markets and measures of equality. The results paint a new, and partly surprising picture” says economist Anja Tolonen.

The dissertation contains some of the first large empirical studies done on the topic. One study explores women’s access to employment in mining areas using data on half a million women and 900 large mines across the continent.

“The opening of a new mine generates new jobs within the service sector. It can be, for example, restaurants or transportation. We see that women leave subsistence farming and start earning cash. But we also see that the effects are temporary – when the mine closes, the jobs disappear.”

In a specific study of gold mines in countries such as Ghana, Mali and Tanzania, the welfare effects have been explored in more detail. The results show that women have better access to health care when the mines are established. In part, this is explained by increased supply of health care locally, but also because women’s autonomy increases.

“We see several signs that norms change with the local economic development. Domestic violence is much less accepted by women in the studied mining areas” says Tolonen.

Moreover, infant mortality decreases drastically. Extremely high infant mortality is not uncommon in the countries in the study: 10 to 15 percent of children do not survive their first year of life. However, in the mining areas, the infant mortality rates halves.

“Even if there are environmental and health risks involved, such as the emission of toxins, it seems like the economic development and welfare effects brought by the mines offset the potential negative consequences.”


The thesis “Mining Booms in Africa and Local Welfare Effects: Labor Markets, Women’s Empowerment and Criminality” was defended on May 29th, 2015.
The Department of Economics, School of Business, Economics and Law at the University of Gothenburg.

Read the thesis: http://hdl.handle.net/2077/38780

Contact:
Anja Tolonen, PhD
Phone: + 46 (0) 31 786 1264
anja.tolonen@economics.gu.se

School of Business, Economics and Law at the University of Gothenburg
With 7 200 students, 450 employees, more than 160 international partner universities and the main subjects – business administration, economics and law – the School has a unique broadness. The research is distinguished by its broad approach, which is interdisciplinary in large measure, and its collaborationacross geographical, departmental and disciplinary boundaries. Much of the research takes place in close co-operation with companies and organisations. The School is one of approximately 150 business schools in the world with a EQUIS accreditation, and the only Swedish business school with AMBA accreditation for its MBA programme.

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