The Effects of Mining Presence on Inequality, Income, and Poverty : Evidence from Peru

This paper studies the effects of mining intensity and presence on Peru's mining districts' welfare from 2004 to 2019. I use a pooled cross-section regression constructed from different sources and make two sets of comparisons: the first compare districts with and without the mining presence within mining provinces, and the second compares districts with and without the mining presence without the constraint of being within mining provinces. The primary dependent variables I include in the model are income inequality, labor income, and poverty rate. In mining districts, inequality has increased, but labor income has increased, and poverty has decreased compared to non-mining districts. However, once control for province-fixed effects and clustered by standard errors at the district level, the significance of inequality is lost, while the impacts on labor income and poverty remain. The transmission mechanism by which the mining presence is human capital, employment, and redistributive policies. Also, I find that the mining presence has had positive effects on labor income in other sectors such as construction and commerce; Finally, I find increases in the labor incomes of unskilled workers but of skilled workers, and it has negatively impacted informal employment