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The local economic impacts of the oil and gas industry: Boom, bust and resilience to shocks

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  • Abboud, Ali
  • Betz, Michael R.

Abstract

In this paper, we study the impact of the oil and gas industry on county-level employment and wage earnings across not only the boom, but also the bust cycle. Our paper is among the first to estimate wage and employment impacts of the bust cycle for the U.S. oil and gas industry and directly compare these employment and wage impacts for the boom. We then evaluate spillovers into other sectors in the economy, comparing impacts on tradable and non-tradable industries for three distinct geographic regions and estimate separate models for rural and urban areas. We find variation across geographic context, but in general the oil and gas bust was associated with a significant decrease in overall employment, with the effect most notable in non-tradable industries in rural counties. Finally, we investigate the differential impact of the 2008 financial crisis on labor in producing and non-producing counties. We find that, employment and wages in oil and gas producing counties were impacted by the financial crisis less than non-oil and gas counties and recovery in oil and gas counties started earlier.

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  • Abboud, Ali & Betz, Michael R., 2021. "The local economic impacts of the oil and gas industry: Boom, bust and resilience to shocks," Energy Economics, Elsevier, vol. 99(C).
    • Handle: RePEc:eee:eneeco:v:99:y:2021:i:c:s0140988321001900
    DOI: 10.1016/j.eneco.2021.105285
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    More about this item

    Keywords

    Natural resources; Oil and gas; Resource curse; Employment;
    All these keywords.

    JEL classification:

    • J01 - Labor and Demographic Economics - - General - - - Labor Economics: General
    • Q32 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Exhaustible Resources and Economic Development
    • R1 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics

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