starting in 1975 to DHS household survey data for women aged 15 – 49, spanning over two decades using spatial information. The unique combination of datasets with more than 500,000 sampled women and almost 300,000 partners in 29 countries enables us to investigate local spillover effects on employment by a difference-in-difference method. By exploiting the spatial and temporal variation in the data, we compare people living close to a mine with those living further away, and individuals living close to a producing mine with those who live in the vicinity of a mine that is yet to open. We include region fixed effects and thereby control for timeinvariant differences between regions, such as time-stable mining strategies, institutions, trade patterns, openness, sectoral composition, level of economic development and gender norms. In addition, by including regional specific time trends we make the identification strategy less reliant on assumption of similar trends across areas.

We show that mine opening triggers a structural shift, whereby women shift from agricultural work to the service sector, or out of the labor force. The effect on services is substantial; it is estimated at a more than 50% increase from the sample mean. The results are robust to a wide battery of robustness checks, such as using different measures of distance and excluding migrants. Our results of a shift toward service sector employment are supported by findings that women are more likely to earn cash and women who work are less likely to work seasonally after a mine has started producing. A back-of-the-envelope calculation estimates that more than 90,000 women get service sector jobs as a result of industrial mining in their communities, and more than 280,000 women leave the labor force. The effects of mine openings wear off with distance and are no longer statistically significant at 50 kilometers from a mine, and mine closing causes the service sector to contract. The partners of the surveyed women shift away from agriculture into skilled manual work with mine opening; this effect reverses once a mine closes. The overall decrease in work force participation induced by mine opening is gender-specific; work participation for women decreases by 5.4 percentage points with mine opening (equivalent to 8.1% change), whereas the corresponding effect for men is a decrease of 3.2 percentage points (equivalent to a 3.3% change). Using changes in world prices for ten minerals we further show that the effects are stronger in years when prices are higher.

There are large and persistent differences in value added per worker in agriculture and non-agriculture sectors in developing countries (Gollin et al., 2012). This difference indicates misallocation of workers, with too many workers in low yielding agriculture. In this paper, we show that mine opening can pull people from low value added sectors to higher value added sectors, such as services and skilled manual labor. We conclude that mining has the power to stimulate non-agricultural sectors, and provide cash earning opportunities. However, mining creates a boom-bust economy on the local level in Africa, as the newly stimulated sectors contract with mine closing.

In the next section we present the data. In Section 3, we lay out the empirical strategy. In Section 4, we present the empirical results and in Section 5, we show robustness tests and heterogeneous effects, and in Section 6, we make concluding remarks.

3