An Economic Analysis of 

the Appalachian Coal 

Industry Ecosystem

West Virginia University

and

The University of Tennessee

Summary

Report

Prepared for the 

Appalachian Regional Commission 

under contract # PW-18673-16

January 2018

AN ECONOMIC ANALYSIS OF 

THE APPALACHIAN COAL 

INDUSTRY ECOSYSTEM 

By West Virginia University

and

The University of Tennessee

Summary Report Submitted to the 

Appalachian Regional Commission, Suite 700

1666 Connecticut Ave., NW

Washington, D.C. 20009-1068

Work completed under contract # PW-18673-16. January 2018
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An Economic Analysis of the Appalachian Coal Industry Ecosystem 

Summary Report 

Contents 

Report Overview ..................................................................................................................... 1

Task 1. An Overview of the Coal Economy in Appalachia ............................................................. 2

Task 2. County-level CIE Supply Chain Analysis ........................................................................... 5

Task 3. Transportation Implications of Coal ............................................................................... 7

Task 4. Economic Impacts and Risks Associated with Electric Power Generation in Appalachia ....... 9

Task 5. Human Capital and the CIE .......................................................................................... 12
An Economic Analysis of the Appalachian Coal Industry Ecosystem 

Report Overview 

The decline in the demand for coal has led to significant negative impacts in areas throughout 

Appalachia. Consider the integrated effects across components of the coal industry ecosystem 

(CIE). As extraction activity is diminished, there are ripples through the industry supply chain 

that extends to a wide number of sectors, occupations, and county and multi-county regions of 

the Appalachian economy. As these suppliers are impacted, jobs are imperiled, and the fiscal 

health of communities is weakened. Displaced workers will need to seek alternative 

employment opportunities that may entail investments in formal education and training, and this 

takes both time and resources. As the economic base suffers, state and local governments will 

see their capacity to fund education weaken as well. The decline in natural gas prices and 

increasing environmental concerns, along with the age of the capital stock, has affected coalfired power generation in the Appalachian Region. When capacity is replaced by natural gas, 

the demand for the Region’s coal is further distressed. The shifting structure and spatial location 

of power generation creates additional impacts on the economic base, tax base, and 

employment prospects. A vibrant rail transportation infrastructure has developed to support 

coal-related commerce and this regional asset is now at risk. Retirement of portions of the 

railroad capital stock may translate into higher transportation costs and diminished opportunities 

for economic development tied to the movement of bulk commodities, inputs, and final products. 

This project was designed to examine comprehensively the Appalachian CIE through in-depth 

quantitative analysis. Through project research we identify, quantify, synthesize, and map 

multiple ecosystem dimensions for Appalachian counties. The CIE is characterized by the 

relationship and interdependence among coal mining, its supply chain linkages, transportation 

services, coal-fired power plants, and human capital resources. These interrelated systems 

analyses are assessed to provide a deeper understanding of the CIE, its supply-chain 

interdependencies and supporting transportation infrastructures, and its impacts on social and 

economic welfare. We identify and assess the historical and anticipated impacts of trends in 

coal production, transportation, and coal-based power generation, as well as impacts on the 

supply-chain linked industry and human capital resources in Appalachia that affect the path of 

regional economic development and individual well-being. 

This research project comprises several interrelated goals and objectives. First, we provide an 

overview of economic conditions in Appalachia with an emphasis on activities related to the coal 

industry ecosystem. Next, a supply-chain analysis of county-based CIEs provides a rich 

characterization of coal-impacted counties by defining and measuring three related dimensions: 

CIE dependence, impact, and risk. These dimensions are defined using Region-based and owncounty industry structure and are used to identify distinct CIE classes. Third, we assess where, 

when, and to what extent CIE related transportation impact hardships will be felt in Appalachian 

communities. In the fourth research project component, given the dominant role of coal-fired 
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power plants in Appalachia, we have used econometric analysis to understand the way in which 

coal-fired power plant shutdowns affect county-level economic outcomes. Our research pays 

special attention to how shutdowns of varying sizes exert disparate economic effects across 

larger versus smaller counties. The final part of the overall research project addresses the 

impacts that coal mining activity will have on the displacement/reabsorption of worker 

occupations, as well as the implications for resources available to fund public education, a key 

to future development in Appalachia.

This report consists of a compilation of executive summaries for each of the five individual task 

reports submitted separately, available as self-contained reports that can be accessed from the 

Appalachian Regional Commission website.

Task 1. An Overview of the Coal Economy in Appalachia 

Eric Bowen, Christiadi, John Deskins, and Brian Lego, West Virginia University

This task report details major trends in coal production in the Appalachian Region over roughly 

the past decade. Highlights of this research are as follows:

COAL PRODUCTION

• Overall Coal Production Decline: Coal production fell by nearly 45 percent overall in

Appalachia between 2005 and 2015. This is more than double the rate of national

decline in coal production of around 21 percent.

• Drivers of National Drop in Coal Demand: Losses in coal production stem from a

perfect storm of three major national factors that have depressed demand for coal:

significant reductions in the cost of natural gas—a competitor fuel to coal in the electric

power industry—due to greatly enhanced productive capacity; a regulatory environment

that has increased the cost of burning coal for electric power generators; and weak

international demand in recent years.

• Concentration of Coal Production Losses: Losses in coal production are heavily

concentrated in Central Appalachia, primarily in southern West Virginia and eastern

Kentucky. This concentration of losses can be traced to low coal mine worker

productivity in this region. After aggressive mining in Central Appalachia for more than a

century, the remaining coal is more expensive to extract, compared to other coalproducing regions, because it tends to be deeper in the ground and/or seams tend to be

thinner.
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• Coal Production Forecast: Our forecast predicts a stabilization of coal output in

Appalachia. This results largely from the expectation of higher natural gas prices in

coming years as infrastructure enhancements broaden markets for natural gas, as well

as from an expectation that there will be no major regulatory changes that increase the

cost of burning coal in coming years. While production in Northern and Southern

Appalachia will largely remain stable, we expect a modest recovery in Central

Appalachia due to improvements in global demand for metallurgical coal. Overall,

however, expected improvements will capture only a small fraction of the decline that

has been observed over the past decade.

EMPLOYMENT and UNEMPLOYMENT

• Coal Industry Employment and Employment Diversification: Coal industry

employment fell by around 27 percent between 2005 and 2015. These losses were

heavily concentrated in Central Appalachia. Further, the counties with the highest

dependence on the coal industry tended to be rural counties in Central Appalachia.

Overall, many of the counties that had the greatest dependence on the coal industry

suffered the greatest losses in coal production and employment.

• Total Private Sector Employment: Total private-sector employment in Appalachian

coal-mining counties has been generally flat over the past few years. Further, total

private-sector employment in the mining counties in Central Appalachia has fallen

substantially in recent years. These facts provide evidence that the decline in coal,

coupled with heavy reliance on coal in some counties, has led to broader negative

spillover effects to regional economies.

• Unemployment: Coal mining counties in Central Appalachia have consistently posted

relatively high unemployment rates in recent years.

• County Snapshot—Central and Northern Appalachia: We provide a close

examination of two specific heavy coal-producing counties—Marshall County, West

Virginia, in Northern Appalachia, and Boone County, West Virginia, in Central

Appalachia. Here we see that these counties have exhibited vastly different outcomes in

recent years in terms of the coal industry and in terms of broader economic outcomes.

Our analysis highlights how economic conditions can vary widely across counties.

POPULATION, LABOR FORCE, and POPULATION AGE DISTRIBUTION

• Population and Labor Force: Total population has fallen by a small margin in the coal

mining counties of Central Appalachia in recent years, perhaps partly as a result of the

decline in the coal industry. Although the overall population loss has been relatively

modest, the drop has been especially pronounced in the prime working-age population

in the mining counties of Appalachia. The labor force has declined substantially in the

coal mining counties of Central Appalachia.
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• Population Age Distribution: Partially as a result of the loss in prime working-age

residents, coal-mining counties in Appalachia have experienced noticeable increases in

the share of individuals who are of retirement age.

INCOME and POVERTY

• Wages and Salary Income: Wages and salary income per job tends to be higher in the

mining counties of Appalachia, compared to non-mining Appalachian counties. This is

likely the result, in part, of high wages in the coal industry. Wage and salary incomes

tend to be lower in the coal-mining counties of Central Appalachia, compared to

Appalachia’s other coal-producing regions.

• Poverty: While poverty has been higher in the mining counties of Appalachia compared

to the non-mining counties for many years, poverty has risen substantially in both groups

of counties in recent years. In the long-term, poverty has been substantially higher in the

coal-mining counties of Central Appalachia compared to the other coal-producing

regions of Appalachia.

EDUCATION and HEALTH

• Education: Although weak education outcomes represent a significant economic

development challenge in Appalachia in general, the data do not reveal that the

attainment of a bachelor’s degree differs noticeably between the mining and non-mining

counties of Appalachia. Rates of college attainment are by far the lowest in the mining

counties of Central Appalachia, compared to the mining counties in the other

Appalachian coal-producing regions.

• Health: Poor health outcomes represent another significant economic development

challenge in Appalachia. The data reveal that overall mortality rates are significantly

higher in the mining counties of Appalachia compared to other counties in the U.S.

Further, mortality in the mining counties of Central Appalachia, which has increased

noticeably in recent years, is highest compared to the mining counties in the other

Appalachian coal-producing regions.
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Task 2. County-level CIE Supply Chain Analysis

Randall Jackson and Péter Járosi, West Virginia University

The continuing decline in the U.S. coal industry has implications that differ from industry to 

industry and from region to region. These differences in industry implications arise because of 

the nature of the coal industry ecosystem (CIE), in which each industry occupies its unique 

position in the coal industry supply chain. There are industries that provide goods and services 

directly to the coal industry, and those that supply the coal industry indirectly via provision of 

goods and services to the first-level suppliers and to their suppliers throughout subsequent 

supply chain levels and linkages. Likewise, each region has a unique mix of industries, so as 

collections of industries, regional economies also vary in terms of their position in the CIE, and 

in terms of the extent to which they are aligned with the coal industry. These critical differences, 

in turn, give rise to impacts of coal decline that can vary substantially from region to region, from 

state to state, and from county to county. 

In this task report, we describe an effort to provide for the Appalachian Region a clearer picture 

of the implications of long term declines in the coal industry, and the way in which these 

implications vary geographically. We develop and implement in this report three measures that 

reveal meaningful characteristics of the CIE at the county level, in terms of: industry and placebased CIE dependence, changes in CIE-dependent employment, and susceptibility to 

anticipated continued coal industry decline. We then combine these three 

measures―Dependence, Impact, and Risk―to form a typology that we apply to identify and 

focus on counties in three identifiable categories: Hardship counties, Vulnerable counties, and 

Depressed counties. 

The 123 Hardship counties rank below the median of all counties on the Dependence and Risk 

dimensions, and above the median on the Impact dimension. These counties have experienced 

high levels of negative impacts, but because they have lost most of their CIE-dependent 

industry jobs, they are not at risk for further substantial coal decline-driven job loss. The 124 

Vulnerable counties rank below the median score on the Impact dimension, but above median 

scores on the Dependence and Risk dimensions. These counties did not exhibit negative 

consequences of CIE decline between 2005 and 2015, but because they are CIE-dependent 

and at risk of further coal industry decline, they form a group of counties with higher potential for 

future coal decline-driven job loss. The 83 Depressed counties score above median on all three 

dimensions. They suffered CIE-dependent job losses between 2005 and 2015, they continue to 

host CIE-dependent industries, and they are at risk of further future coal decline job-loss.

Finally, we narrow focus on the Depressed counties that rank highest on all three CIEdimensions. Specifically, there are nine Depressed counties that rank in the top 20 on all three 

CIE dimensions. These are Mingo and Boone Counties in West Virginia; Harlan, Leslie, Martin, 

Pike, and Perry Counties in Kentucky; and Buchanan and Dickenson in Virginia. Unemployment 
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rates in these counties range from a low of 8.9 percent to a high of 13.2 percent; job losses 

have been substantial, as high as 34 percent and averaging 21 percent. On average in these 

counties, roughly one in ten employees works in the coal industry itself, and their wages 

account for almost 23 percent of county totals. In two of these counties, coal-industry 

employment shares exceed 20 percent, and corresponding wage shares of total exceed 37 

percent. These Depressed counties clearly warrant special attention and concern if current coal 

industry trends continue.
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Task 3. Transportation Implications of Coal

Mark Burton, University of Tennessee

Recognizing the realities of a changing energy landscape, the Appalachian Regional 

Commission (ARC) has commissioned a series of research initiatives that explore various 

aspects of Appalachian Coal Industry Ecosystems (CIE). This task report describes the goals, 

execution, and findings of a CIE effort focused on rail freight access in the Appalachian Region.

For more than a century, railroads have played an important role in Appalachia’s coal industry 

ecosystem. But that ecosystem is changing, and the long-run, downward trend in Appalachian 

coal production implies a large and lasting reduction in coal traffic for the Region’s railroads. 

The recently encountered cyclical traffic lapse provided policymakers with a glimpse as to how 

rail carriers may adapt to more permanent traffic losses. Taken as a whole, this information 

suggests that preserving rail freight access in Appalachia’s core may eventually become 

difficult.

Utilizing network modeling techniques developed at the University of Tennessee, the study team 

modeled railroad network flows under baseline (2011) traffic conditions and with the diminished 

coal flows predicted for 2036. Key findings include:

• Rather than unfolding evenly through time, the results suggest that the largest declines

in railroad tonnage may have already been observed.

• Geographically, with only a few exceptions, any threats to rail access associated with

reduced coal volumes seem to be constrained to Appalachia.

• While unwelcome, the magnitude of losses to rail access, either in the form of physical

proximity or affordability, is not currently predicted to be catastrophic. However, this

prediction depends pivotally on rail carriers’ abilities to garner adequate revenues from

remaining freight traffic.

• Continued access to eastern ports and the global connectivity they afford depends

largely on Appalachian coal’s competitiveness in international markets and the strength

of those markets going forward.

The results suggest that, during 2015 and 2016, aggressive electric utility strategies (including 

accelerated plant retirements), combined with a pronounced cyclical downturn in coal demand, 

compressed more than a decade’s worth of reduced coal consumption and transportation into a 

two-year span. Setting aside the broader effects of these events, the rapid reduction in coalrelated railroad activity eliminated roughly 2,000 full-time railroad jobs and $150 million in 

income from a region that can ill-afford such disruptions.

Still, for policymakers, there are two advantages in this outcome. First, beginning in late 2016 

and continuing throughout 2017, coal production and transportation began to regain the more 

gradual, long-run path predicted by the West Virginia University forecasts. Barring any 

additional, unanticipated disruptions, this affords policymakers the opportunity to evaluate and 
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implement policies that help ensure the preservation of stable rail-freight access in the face of 

further declines in coal outputs.

As importantly, the temporal compression in reduced coal activity forced the Region’s railroads 

to act with an immediacy that provides valuable information regarding future network 

adjustments. Specifically, while the railroads have acted with deliberate speed, they have also 

avoided responses that are irreversible. In adjusting to the 2015-16 collapse of coal demands, 

the railroads have not abandoned trackage, have not razed or sold terminal facilities, and have 

shed unsustainable lines through leases rather than line sales. In aggregate, these actions 

suggest a railroad industry that is hesitant to permanently relinquish freight capacity.

If one accepts the long-run reduction in eastern railroad coal traffic as probable, the next 

question is whether existing or foreseeable non-coal traffic will be drawn to Appalachianinclusive rail corridors by capacity made available through the loss of coal volumes. The 

analysis reported here suggests that this will not happen. The rail routes in and through 

Appalachia were built to access the Region’s coal and timber. The railroad trunk lines that first 

connected the American East with the nation’s interior were built around Appalachia, much like 

the Interstate highways that came a century later.

The final question is—absent robust coal volumes and without a probable substitute—whether 

surviving Appalachian freight traffic will generate sufficient activity to sustain the Region’s rail 

access. The answer, for the moment, is a somewhat tentative probably. However, the key to this 

assurance is coal volumes that do not permanently fall too far below those predicted in the 

above analysis. Without the residual forecasted coal traffic, a positive outcome would be 

impossible.
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Task 4. Economic Impacts and Risks Associated with Electric 

Power Generation in Appalachia 

Eric Bowen, Christiadi, and John Deskins, West Virginia University; Charles Sims, 

and Rebecca J. Davis, University of Tennessee

The electric power industry is a crucial part of the coal ecosystem, accounting for the large 

majority of the total coal production sold within the United States. This report provides a detailed 

examination of the economic impact of changes in electric power generation in Appalachia over 

the past decade. We begin in Chapter 1 with an overview of the industry, paying special 

attention to coal-fired power generation. In Chapter 2, we estimate the effect of a loss of a 

power plant on county economic outcomes. Last, in Chapter 3, we examine the risk factors for 

further power plant retirements. Highlights of this research are as follows:

THE ELECTRIC POWER INDUSTRY

• Overall Electricity Generation: Overall electric power generation changed little

nationally over the years 2005 through 2015. However, generation from the Appalachian

Region fell by more than 15 percent during that period, while generation outside the

Region rose by nearly 3 percent.

• Electric Power Generation Fuel Mix: Coal has fallen substantially as a fuel for electric

power generation in Appalachia. Coal represented around 53 percent of total generation

in Appalachia in 2015, down from just over 74 percent 10 years prior. However,

Appalachia remains much more reliant on coal for electric power generation compared

with the rest of the nation, where coal represents around 35 percent of generation.

• Electric Power Sector Employment: Total electric power employment has fallen

considerably over the period of analysis. However, employment declined to a greater

degree in Appalachia, falling from just over 50,000 workers to about 48,500, a decline of

more than 3 percent, compared with a decline of less than 1 percent in the rest of the

United States.

• Coal-Fired Power Plant Retirements: Coal-fired generation capacity has fallen by

around 18 percent since 2005, while natural gas-fired generation capacity has risen

more gradually by around 4 percentage points per year on average over the decade of

analysis. Appalachia contains less than 20 percent of the operating coal-fired generation

capacity in the four NERC regions surrounding it. However, over 40 percent of the

retired coal-fired capacity can be found in Appalachia.
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THE REGIONAL ECONOMIC IMPACT OF ELECTRIC POWER PLANTS

We estimate the economic impact of electric power plants on regional economies using 

regression analysis with data from all counties in the 13 Appalachian states that contained any 

electric power generation capacity during any year between 2005 and 2015. In particular, we 

estimate wage and salary income in a county as a function of the coal-fired electric power 

generation capacity and the natural gas-fired electric power generation capacity in the county. 

Results are as follows:

• We are able to statistically identify a positive effect of coal-fired electric power generation

capacity on wage and salary income in a county.

• We estimate that the effect of coal-fired electric power generation capacity on wage and

salary income is relatively large for small population counties, but that the effect

diminishes to zero for sufficiently large population counties.

• Our estimates of the magnitude of the effect of a coal-fired power plant shutdown range

dramatically. For illustrative purposes, in the one extreme, we estimate that the

shutdown of a large coal-fired power plant in a small county can lead to a loss of around

two-thirds of the county’s wage and salary income. In contrast, for a mid-size plant

shutdown in a mid-size county, we estimate that the plant shutdown reduces wage and

salary income by around 5 percent.

• We are not able to statistically identify an effect of natural-gas fired electric power

generation capacity on county-level wage and salary income.

RISK FACTOR ANALYSIS FOR COAL-FIRED GENERATION RETIREMENTS AND 

REPOWERINGS

We use data on 57 coal-fired unit retirements in the Appalachian Region to inform a stochastic 

dynamic programming model to identify three primary and three secondary risk factors that 

shorten the economic lifetime of a coal-fired generating unit. Primary risk factors are those

where a 5 percent change results in a greater than 5 percent decrease in the economic lifetime 

of the unit. Secondary risk factors are those where a 5 percent change results in a 1 to 5 

percent decrease in the economic lifetime of the unit. We also identify factors that have very 

little influence on the economic lifetime of a coal-fired unit. 

• Primary risk factors include a high fixed cost of generation, low cost of retiring the unit,

and a low discount rate used by utilities in decision-making. These primary risk factors

are influenced by a variety of drivers including construction costs, land values,

macroeconomic factors, and whether the unit is in a regulated market.
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• Secondary risk factors include low fuel efficiency, low generation responsiveness, and

low/stable generation revenues. These secondary risk factors are influenced by a variety

of drivers including age, capacity factor, ramp rate, and electricity markets.

• Coal prices have very little influence on the retirement decision due to the prevalence of

long-term coal contracts in the electricity generation industry. The insensitivity of the

retirement decision to coal prices suggests that there is little that the coal industry could

do to delay the recent spate of coal-fired plant retirements. It also suggests that

government intervention in the coal industry that lowers delivered coal prices or adds

stability to the coal market would have little to no impact on retirement decisions.
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Task 5. Human Capital and the CIE

Matthew N. Murray, University of Tennessee, and Péter V. Schaeffer, West 

Virginia University

Task 5 of the comprehensive report has two goals. The first is to examine occupations that 

might be affected by employment losses in the coal industry ecosystem (CIE). The primary 

focus is on direct production employment in the coal sector, but some references are also made 

to managerial support workers and indirect workers in the coal industry supply chain. 

Potentially-impacted occupations are identified, as are alternative occupational opportunities in 

other sectors of the economy where coal workers might be absorbed. We also discuss coal 

worker transition time from unemployment status to employment status and identify factors that 

both encourage and prevent timely transitions. This discussion is framed by an overview of 

broad labor market conditions throughout the Appalachian Region. The second goal is to 

assess the state and local elementary and secondary education funding implications of a 

declining CIE. Considered are state funding sources and mechanisms and local funding sources 

for education that rely on local tax capacity and effort to complement state resources in support 

of elementary and secondary education. Together these various components of the analysis 

enable an evaluation of future employment prospects for the current coal workforce along with 

the funding streams that will affect the quality of the workforce of the future through the support 

for K-12 education.

The analysis of potentially-affected coal miner occupations begins with an overview of labor 

market conditions with a spotlight on mining counties within the Appalachian Region, as defined 

by those counties with coal employment in 2010. These counties are referred to as coalemployment counties or simply coal counties in what follows. To frame the discussion of coalemployment communities, we make comparisons to the Appalachian Region, states that are 

represented in the Appalachian Region, and the national economy. The analysis shows that 

labor markets within coal communities and the Appalachian Region itself are generally 

depressed relative to the states and the United States. The characteristics of these labor 

markets suggests that there will be difficulties creating robust new employment opportunities in 

the Region. 

There were 129 counties in the Appalachian Region that had coal employment in 2010. 

Seventy-eight of these counties saw coal employment contract between 2000 and 2015. In 

2015, three counties were reliant on coal employment for more than 20 percent of their 

employment base and another 13 counties were reliant on coal for 10-20 percent of their local 

employment base. Of these 16 counties, only four have experienced employment growth since 

2010.

Highly-paid coal miners generally have limited re-employment opportunities within their place of 

residence, especially in terms of similar occupations and pay scales. We evaluate alternative 
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employment opportunities for coal workers by isolating their occupational classifications and 

comparing these to equivalent occupational classifications for workers in the manufacturing, 

construction, and transportation sectors. This analysis is undertaken for two regional 

geographies: (i) an aggregation of Appalachian counties within a given state and (ii) entire state 

economies for Appalachian states that have coal communities. These broad regions are chosen 

since individual counties offer insufficient scale and diversity to absorb coal workers. One 

important implication is that coal miners may be required to engage in lengthy commutes or 

migrate from their current place of residence in pursuit of gainful employment opportunities 

outside of the coal industry. Commuting to jobs in another county is already a common 

occurrence in Appalachia. Outmigration may represent a potentially significant hurdle since the 

population of the Appalachian Region is characterized by relatively low mobility rates relative to 

the national population. Retraining and other assistance will likely be needed for many of those 

displaced by declining coal production.

The coal sectors in Alabama, Pennsylvania and Ohio have relatively small numbers of 

occupations that are equivalent to occupations in manufacturing, construction and transportation 

at the state and substate regional levels. These small numbers suggest that it will be relatively 

easy to find employment opportunities outside the coal sector. However, digging beneath the 

surface shows that in these same states there are several specific occupational categories in 

the coal sector that have no equivalent occupations in other sectors. In other instances, the 

number of equivalent occupations in other sectors is limited in supply. As is generally the case, 

individual counties may be at significant risk of hardship through coal industry transition, but this 

can be masked across multi-county areas. 

In contrast, the coal sectors in Kentucky, Virginia and West Virginia each have relatively large 

numbers of occupations without equivalent occupations in the manufacturing, construction and 

transportation sectors. This means that it will be harder to absorb coal workers into other 

sectors of the economy. In Kentucky, six occupations in the coal industry representing 2,901 

positions have no counterparts outside the coal sector; in Virginia, there are eight occupations 

with 6,048 positions that have no equivalent occupations in manufacturing, construction and 

transportation; and in West Virginia, there are 18 coal occupations with no counterpart 

occupations elsewhere in the state. For West Virginia, these occupations represent 6,580 

positions and more than one-third of all occupations in the state’s coal industry. Six occupations 

representing 4,722 positions in Kentucky have no counterparts in the state.

Funding elementary and secondary education is a core government function that helps promote 

economic development and individual and family wellbeing. Elementary and secondary 

education is funded by revenue from federal, state and local governments. Local revenue is 

especially important since it is so closely tied to the performance of the coal industry. Because 

incomes are below average in the Appalachian Region (i.e. the Region is characterized by low 

tax capacity), per capita local tax burdens are also below the national average. In 2014, nominal 

per capita local taxes among coal-employment counties totaled $1,298 compared to a national 

average of $1,875. West Virginia and Kentucky have especially low per capita burdens. 

However, when one accounts for differences in income, the evidence indicates that Appalachian 
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counties choose to impose relatively low burdens on themselves and are thus characterized by 

low tax effort. While per capita income in coal communities is 94.1 percent of the national 

average, revenues in coal communities are just 69.2 percent of the national average. 

All the Appalachian states have state funding programs that contribute significantly to local 

support for K-12 education. In general, these complicated formulas account for low tax capacity 

jurisdictions and seek to both boost funding and narrow funding disparities through foundation 

aid and/or equalization programs targeted to local spending or the local tax base. Nominal per 

pupil state funding for K-12 education was $6,639 in coal-employment Appalachian 

communities in 2014, which is higher than spending levels in other Appalachian counties, states 

in the Appalachian Region, and the United States. Per pupil spending was highest in West 

Virginia. Total state funding support in recent years has grown at rates that compare favorably 

to other regions. Total local per pupil revenue to support elementary and secondary education in 

coal communities has hovered near the national average. Between 2010 and 2014, local per 

pupil revenue growth was up 14.1 percent in coal communities versus 5.6 percent growth for 

localities across the country. Together these data do not reveal declining support for K-12 

education in coal-employment communities in Appalachia. 

Current education spending per pupil in coal communities was $12,119 in 2014, well ahead of 

the $11,307 national average and the $10,798 Appalachian Region average. Coal communities 

have consistently spent more per pupil than the national average since 2000. However, current 

per pupil spending did decline between 2010 and 2014 in Kentucky, Virginia and West Virginia, 

as well as in a number of coal communities in Alabama, Ohio and Tennessee, despite growth in 

total state and local revenue per pupil. In addition, enrollments have declined in all coalemployment states other than Alabama, which has seen very small growth. Between 2000 and 

2014, coal counties saw enrollment counts fall by 158,192. Enrollments fell most sharply in 

Mississippi (down 24.9 percent) and Maryland (down 18.5 percent).