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Employment Impacts of Upstream Oil and Gas Investment in the United States

Author

Listed:
  • Agerton, Mark

    (James A Baker III Institute for Public Policy, Rice University)

  • Hartley, Peter

    (James A Baker III Institute for Public Policy, Rice University)

  • Medlock, Kenneth B., III

    (James A Baker III Institute for Public Policy, Rice University)

  • Temzelidea, Ted

    (James A Baker III Institute for Public Policy, Rice University)

Abstract

Technological progress in the exploration and production of oil and gas during the 2000s has led to a boom in upstream investment and has increased the domestic supply of fossil fuels. It is unknown, however, how many jobs this boom has created. We use time-series methods at the national level and dynamic panel methods at the state-level to understand how the increase in exploration and production activity has impacted employment. We find robust statistical support for the hypothesis that changes in drilling for oil and gas as captured by rig-counts do, in fact, have an economically meaningful and positive impact on employment. The strongest impact is contemporaneous, though months later in the year also experience statistically and economically meaningful growth. Once dynamic effects are accounted for, we estimate that an additional rig-count results in the creation of 37 jobs immediately and 224 jobs in the long run, though our robustness checks suggest that these multipliers could be bigger.

Suggested Citation

  • Agerton, Mark & Hartley, Peter & Medlock, Kenneth B., III & Temzelidea, Ted, 2014. "Employment Impacts of Upstream Oil and Gas Investment in the United States," Working Papers 14-004, Rice University, Department of Economics.
    • Handle: RePEc:ecl:riceco:14-004
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    References listed on IDEAS

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    More about this item

    JEL classification:

    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • Q32 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Exhaustible Resources and Economic Development
    • Q33 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Resource Booms (Dutch Disease)
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes

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