Conference Agenda

This study examines how mine size shapes the local economic impacts of coal mine closures in China. Leveraging granular information of 7,006 coal mines and nighttime light data, we implement staggered difference-in-differences and instrumental variable strategies to identify causal effects and document sharply divergent results: while the closure of large mines diminishes local prosperity, the closure of small ones unexpectedly increases nighttime light intensity. The positive outcome following small mine closures is driven by not only top-down special fiscal support, but also bottom-up land use change, informal social support embedded in clan networks, and a higher efficiency of coal enterprise exit. Beyond mine size, we also highlight the need for context-specific transition policies for resource-dependent and poor regions, historically significant mines, unprepared closures, private-owned mines, and mines operated by nonlocal enterprises. Further micro-level analysis reveals that large mine closures disproportionately reduce income and increase unemployment risk among females. Overall, our mine size-based evidence shows that coal mine closures produce systematic winners and losers; thus, a context-differentiated rather than one-size-fits-all policy design is needed to reduce economic loss during the process of coal phase-out.