Labour income effects of the recent “mining boom” in northern Sweden

During the early 21st century, the world market prices for minerals increased dramatically. As a consequence of this development, large investments were made in mining all around the world. Increased exploration activities, the opening of new mines and large investment schemes in already operating mines and related physical infrastructure also gave rise to a “mining boom” in the remote and sparsely populated areas of northern Sweden. New jobs were generated in the mining sector, but the question of whether the “mining boom” also has stimulated economic development in a broader sense in these areas has been more open. The present article investigated whether labour incomes have increased not only in sectors clearly connected to mining, but also in other parts of the local and regional economy. This was done by following the income changes of residents in the mining areas of northern Sweden over the time period 2004-2010 and by using a propensity score matching estimator method (PSM). The results show rapid income growth for employees in the mining industry and construction sectors, but also some growth in several other sectors, indicating spread effects to the rest of the local and regional economies. The impact, however, is much stronger in the largest mining towns than in communities where mining is of less significance.