Large‐Scale Mining and Local Impacts: Evidence From Mongolia

ABSTRACT This paper investigates the indirect economic impacts of large‐scale mining activities on household expenditure patterns using the difference‐in‐differences framework and the Mongolia Household Socio‐Economic Survey data from 2008 to 2016. It is found that mining activities increased household expenditures on food and electricity. Expenditures on health also increased in the resource‐producing region, while there was no increase in the level of illness. Although households reduced their expenditures on education, their educational attainment increased more than the control group. The findings highlight that the positive impacts of the mining sector are likely to be higher than that indicated by its direct linkages, as well as traditional welfare measurements, such as household aggregate income and consumption.