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

Author

Listed:
  • Mark Agerton
  • Peter Hartley
  • Kenneth Medlock III
  • Ted Temzelides

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

  • Mark Agerton & Peter Hartley & Kenneth Medlock III & Ted Temzelides, 2015. "Employment Impacts of Upstream Oil and Gas Investment in the United States," IMF Working Papers 15/28, International Monetary Fund.
  • Handle: RePEc:imf:imfwpa:15/28
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Arezki, Rabah & Fetzer, Thiemo & Pisch, Frank, 2017. "On the comparative advantage of U.S. manufacturing: Evidence from the shale gas revolution," Journal of International Economics, Elsevier, vol. 107(C), pages 34-59.
    2. repec:eee:eneeco:v:67:y:2017:i:c:p:121-135 is not listed on IDEAS
    3. Hartley, Peter R. & Medlock, Kenneth B. & Temzelides, Ted & Zhang, Xinya, 2015. "Local employment impact from competing energy sources: Shale gas versus wind generation in Texas," Energy Economics, Elsevier, vol. 49(C), pages 610-619.
    4. repec:eee:enepol:v:118:y:2018:i:c:p:109-120 is not listed on IDEAS
    5. Brown, Jason, 2017. "Response of Consumer Debt to Income Shocks: The Case of Energy Booms and Busts," Research Working Paper RWP 17-5, Federal Reserve Bank of Kansas City.
    6. Brown, Jason, 2015. "The response of employment to changes in oil and gas exploration and drilling," Economic Review, Federal Reserve Bank of Kansas City, issue Q II, pages 57-81.
    7. repec:eee:resene:v:53:y:2018:i:c:p:162-197 is not listed on IDEAS
    8. Cai, Zhengyu & Maguire, Karen & Winters, John V., 2018. "Who Benefits from Local Oil and Gas Employment? Labor Market Composition in the Oil and Gas Industry in Texas," GLO Discussion Paper Series 246, Global Labor Organization (GLO).
    9. Joseph Marchand & Jeremy Weber, 2018. "Local Labor Markets And Natural Resources: A Synthesis Of The Literature," Journal of Economic Surveys, Wiley Blackwell, vol. 32(2), pages 469-490, April.
    10. Catherine Hausman & Ryan Kellogg, 2015. "Welfare and Distributional Implications of Shale Gas," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 46(1 (Spring), pages 71-139.
    11. Wang, Haoying, 2018. "An Economic Impact Analysis of Oil and Natural Gas Development in the Permian Basin," MPRA Paper 89280, University Library of Munich, Germany.
    12. repec:gam:jeners:v:11:y:2018:i:10:p:2779-:d:176073 is not listed on IDEAS
    13. repec:cep:cepdps:dp1399 is not listed on IDEAS
    14. Rickman, Dan S. & Wang, Hongbo, 2018. "What Goes Up Must Come Down? A Case Study of the Recent Oil and Gas Employment Cycle in Louisiana, North Dakota and Oklahoma," MPRA Paper 87252, University Library of Munich, Germany.

    More about this item

    Keywords

    Employment; United States; gas; oil; energy; drilling; Labor Force and Employment; Size; and Structure;

    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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