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Local economic impact of boom and bust in mineral resource extraction in the United States: A spatial econometrics analysis

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  • Ouedraogo, Abdoulaye

Abstract

This paper examines how shocks in the U.S. mineral resource extraction (MRE) industry impact MRE-dependent counties using county level data between 1970- and 2012. A difference-in-difference fixed effects model and a spatial modeling to incorporate spatial heterogeneity and dependence among U.S. local areas that are in close geographical proximity are employed in this study. The results show that MRE industry employment grew faster during boom periods and slower during the bust period in MRE dependent counties. MRE earnings and earnings per worker grew slower during boom periods and faster during the bust period. The findings give evidence of negative spatial indirect spillover effects between neighboring counties’ MRE sector labor markets. An analysis of the effect of shocks in the MRE sector on the non-MRE sectors shows that in MRE dependent counties non-MRE sector employment grew slower during boom periods and faster during the bust period. Positive shocks in the MRE sector had no effect on the manufacturing sector labor market; however, negative shocks had a positively effect. Booms in the MRE sector positively impacted the construction sector, while negatively affecting the service and retail trade sectors’ labor markets in MRE dependent counties. Finally, this study finds that male population grew faster, while female population grew slower in the MRE dependent counties.

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  • Ouedraogo, Abdoulaye, 2016. "Local economic impact of boom and bust in mineral resource extraction in the United States: A spatial econometrics analysis," Resources Policy, Elsevier, vol. 50(C), pages 292-305.
    • Handle: RePEc:eee:jrpoli:v:50:y:2016:i:c:p:292-305
    DOI: 10.1016/j.resourpol.2016.09.009
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    Cited by:

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    3. Grant Mark Nülle & Graham A. Davis, 2018. "Neither Dutch nor disease?—natural resource booms in theory and empirics," Mineral Economics, Springer;Raw Materials Group (RMG);Luleå University of Technology, vol. 31(1), pages 35-59, May.
    4. Shuo Wang & Junnian Song & Xian’En Wang & Wei Yang, 2019. "The Spatial and Temporal Research on the Coupling and Coordinated Relationship between Social Economy and Energy Environment in the Belt and Road Initiatives," Sustainability, MDPI, vol. 11(2), pages 1-18, January.
    5. Newell, Richard G. & Raimi, Daniel, 2018. "The fiscal impacts of increased U.S. oil and gas development on local governments," Energy Policy, Elsevier, vol. 117(C), pages 14-24.
    6. Corey Young, 2023. "Between a Rock and a Hard Place: Governing Unconventional Natural Gas at the Local Level in the United States," Sustainability, MDPI, vol. 15(7), pages 1-14, March.
    7. Nassani, Abdelmohsen A. & Aldakhil, Abdullah Mohammed & Zaman, Khalid, 2021. "Ecological footprints jeopardy for mineral resource extraction: Efficient use of energy, financial development and insurance services to conserve natural resources," Resources Policy, Elsevier, vol. 74(C).

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    More about this item

    Keywords

    Mineral Resource Extraction (MRE); Local economic impact; Boom and bust;
    All these keywords.

    JEL classification:

    • R1 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics
    • 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)
    • Q4 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy

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