# **1 Introduction**

Africa’s opportunities are being transformed by new discoveries of natural resources and their rising prices (Collier, 2010), and the mining sector is the main recipient of foreign direct investment in Sub-Saharan Africa (World Bank, 2011). Whether the discovery of natural resources is a blessing or a curse to the economy and to a country’s citizens is a contentious issue (see Frankel, 2010 or van der Ploeg, 2011 for an overview), and natural resource dependence is linked to various outcomes at the national level: institutions (e.g., Mehlum et al., 2006a, 2006b), corruption (e.g., Leite and Weidmann, 2002), civil war and conflict (e.g., Collier and Hoeffler, 2004, 2005), rent appropriation by an elite (e.g., Auty, 2001, 2007), democracy (e.g., Barro, 2000; Jensen and Wantchekon, 2004), and female labor force participation (Ross, 2008, 2012).<sup>1</sup> While the country-level economic and political effects of extractive industries are well explored, the research on their local economic effects is nascent. The present paper adds to recent literature on local effects of natural resources (e.g. Allcott and Keniston 2014; Aragon and Rud, 2013b; Berman et al., 2014; Caselli and Michaels, 2013; Michaels, 2011; Wilson, 2012), by investigating the effects of large-scale mineral mining on local labor markets. We use the best available survey data for Africa, Demographic and Health Surveys (DHS).<sup>2</sup> The main focus is on women’s labor market opportunities, and we contrast our findings with the effects for men. Access to employment improves women’s lives and is listed among the top five priorities for promoting gender equality in the 2012 World Development Report (World Bank, 2012).

It is theoretically ambiguous whether industrial mining increases or decreases female employment. The African Mining Vision, formulated by the member states of the African Union, together with the African Development Bank and the United Nations, spells out the risk that extractive industries may consolidate gender disparities in economic opportunities, with losses to women as a by-product of such industries (UNECA, 2011). Similarly, Ross (2008, 2012) claims that exploitation of natural resources hurts women’s employment via both demand and supply channels. In his model, female labor supply is reduced via a household income effect, spurred by higher male incomes and/or increased government transfers. The demand for female labor decreases as export-oriented and female-dominated manufacturing is crowded out by Dutch disease effects. He tests his theory using cross country regressions of female labor force participation on oil wealth and finds that oil rich countries have fewer women working, a finding he claims is also valid for mineral mining. There is, however, little reason to expect these effects in Sub-Saharan Africa (SSA). First, the manufacturing sector in rural SSA is small (see

> 1Most of the literature on the resource curse, including Ross (2008, 2012), has focused on the national level. The national level focus and cross country-based literature face severe endogeneity problems. Differences in resource abundance are endogenous to factors such as institutions, civil wars, and growth (Brunnschweiler and Bulte 2008a, 2008b, 2009; Brückner and Ciccone, 2010; De Luca et al. 2012). The efficiency of the economy in general (Norman, 2009) and the protection of property rights can influence the search for and exploitation of resources (Wright and Czelusta, 2003).

> 2 DHS focuses predominantly on women but we add information on partners’ employment as well as employment for a smaller sample of men.

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