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Who Wins In An Energy Boom? Evidence From Wage Rates And Housing

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  • Grant D. Jacobsen

Abstract

This article presents evidence on the distributional effects of energy extraction by examining the effect of the recent U.S. energy boom on wage rates and housing. The boom increased local wage rates in almost every major occupational category. The increase occurred regardless of whether the occupation experienced a corresponding change in employment, suggesting a tighter labor market that benefited local workers. Wage rates also increased substantially across the entire wage rate distribution, although the percentage increase was slightly higher at the bottom of the distribution than at the top. Local housing values and rental prices both increased, thereby benefiting landowners. For renters, the increase in prices was completely offset by a contemporaneous increase in income. The results suggest that bans on drilling have negative monetary consequences for a large share of local residents. (JEL J23, Q33, R31)

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  • Grant D. Jacobsen, 2019. "Who Wins In An Energy Boom? Evidence From Wage Rates And Housing," Economic Inquiry, Western Economic Association International, vol. 57(1), pages 9-32, January.
  • Handle: RePEc:bla:ecinqu:v:57:y:2019:i:1:p:9-32
    DOI: 10.1111/ecin.12725
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    2. Hess, Joshua H. & Manning, Dale T. & Iverson, Terry & Cutler, Harvey, 2019. "Uncertainty, learning, and local opposition to hydraulic fracturing," Resource and Energy Economics, Elsevier, vol. 55(C), pages 102-123.
    3. Rickman, Dan & Wang, Hongbo, 2020. "What goes up must come down? The recent economic cycles of the four most oil and gas dominated states in the US," Energy Economics, Elsevier, vol. 86(C).
    4. Chirakijja, Janjala & Jayachandran, Seema & Ong, Pinchuan, 2019. "Inexpensive Heating Reduces Winter Mortality," CEPR Discussion Papers 13603, C.E.P.R. Discussion Papers.
    5. Andrew L. Owen, 2022. "The Fracking Boom, Labor Structure, and Adolescent Fertility," Population Research and Policy Review, Springer;Southern Demographic Association (SDA), vol. 41(5), pages 2211-2231, October.
    6. Jason P. Brown, 2021. "Response of Consumer Debt to Income Shocks: The Case of Energy Booms and Busts," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 53(7), pages 1629-1675, October.
    7. Weinstein, Amanda L. & Partridge, Mark D. & Tsvetkova, Alexandra, 2018. "Follow the money: Aggregate, sectoral and spatial effects of an energy boom on local earnings," Resources Policy, Elsevier, vol. 55(C), pages 196-209.
    8. Guettabi, Mouhcine & James, Alexander, 2020. "Who benefits from an oil boom? Evidence from a unique Alaskan data set," Resource and Energy Economics, Elsevier, vol. 62(C).
    9. Cai, Jingjing & De Silva, Dakshina G. & Slechten, Aurelie, 2021. "Effects of oil booms on the local environment," Energy Economics, Elsevier, vol. 101(C).
    10. Kuan‐Ming Huang & Xiaoli Etienne, 2021. "Impact of Marcellus and Utica shale exploitation on Ohio, Pennsylvania, and West Virginia Regional Economies: A synthetic control analysis," Papers in Regional Science, Wiley Blackwell, vol. 100(6), pages 1449-1479, December.
    11. Nathaly M. Rivera, 2020. "Is Mining an Environmental Disamenity? Evidence from Resource Extraction Site Openings," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 75(3), pages 485-528, March.
    12. Rivera, Nathaly M. & Loveridge, Scott, 2022. "Coal-to-gas fuel switching and its effects on housing prices," Energy Economics, Elsevier, vol. 106(C).
    13. Weinstein, Amanda & Partridge, Mark & Tsvetkova, Alexandra, 2017. "Follow the Money: How Does the Income Flow After an Energy Boom," MPRA Paper 77336, University Library of Munich, Germany.
    14. Upton, Gregory B. & Yu, Han, 2021. "Labor demand shocks and earnings and employment differentials: Evidence from the U.S. shale oil & gas boom," Energy Economics, Elsevier, vol. 102(C).
    15. Grant D. Jacobsen, 2019. "The impact of energy booms on local workers," IZA World of Labor, Institute of Labor Economics (IZA), pages 468-468, November.

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    More about this item

    JEL classification:

    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • Q33 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Resource Booms (Dutch Disease)
    • R31 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Housing Supply and Markets

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