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Spatial Diffusion of Local Economic Shocks in Social Networks: Evidence from the US Fracking Boom

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  • Andreas Diemer

Abstract

I study the role of social networks in the propagation of economic shocks across space. Combining comprehensive data on US online friendships with extraction activity during the fracking boom, I show that exogenous changes in economic conditions in one area affect outcomes in socially proximate places, regardless of how far apart they are geographically. Social exposure to fracking generates a wage spillover amounting to one-third of every dollar of energy produced in a county’s social network. This spillover decays slowly in space and is associated with a large mobility response. Diffusion mainly stems from the commuting of transient fracking workers.

Suggested Citation

  • Andreas Diemer, 2026. "Spatial Diffusion of Local Economic Shocks in Social Networks: Evidence from the US Fracking Boom," Journal of Labor Economics, University of Chicago Press, vol. 44(1), pages 271-308.
    • Handle: RePEc:ucp:jlabec:doi:10.1086/732300
    DOI: 10.1086/732300
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