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Impact of oil booms and busts on human capital investment in the USA

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  • Anil Kumar

    (Federal Reserve Bank of Dallas)

Abstract

This paper uses Census IPUMS data from 1970 to 2000 and ACS data from 2010 to estimate the impact of oil booms and busts on wages and human capital formation in the USA. The paper finds that the oil boom between 1970 and 1980 was associated with a slower growth in the relative demand for skills in the oil and gas sector and regions where the sector had a large presence. The oil boom led to a sharp rise in real wages and a modest decline in college wage premium in oil-rich regions in the USA. Using a synthetic cohort approach, the paper finds that relative to cohorts who went to high school in the pre-oil boom period, the cohort reaching high school age during the oil boom was about 1–2% points less likely to have a college degree by 2000 and 2010.

Suggested Citation

  • Anil Kumar, 2017. "Impact of oil booms and busts on human capital investment in the USA," Empirical Economics, Springer, vol. 52(3), pages 1089-1114, May.
    • Handle: RePEc:spr:empeco:v:52:y:2017:i:3:d:10.1007_s00181-016-1192-3
    DOI: 10.1007/s00181-016-1192-3
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    Keywords

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    JEL classification:

    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy
    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
    • J48 - Labor and Demographic Economics - - Particular Labor Markets - - - Particular Labor Markets; Public Policy

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