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Who Needs a Fracking Education? The Educational Response to Low-Skill Biased Technological Change

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  • Elizabeth U. Cascio
  • Ayushi Narayan

Abstract

We explore the educational response to fracking, a recent technological breakthrough in the oil and gas industry, taking advantage of the timing of its diffusion and spatial variation in shale reserves. We show that fracking has significantly increased relative demand for less-educated male labor and high school dropout rates of male teens, both overall and relative to females. Our estimates imply that, absent fracking, the teen male dropout rate would have been 1 percentage point lower over 2011-15 in the average labor market with shale reserves, implying an elasticity of school enrollment with respect to earnings below historical estimates. Fracking increased earnings more among young men than teenage boys, suggesting that educational decisions respond to improved earnings prospects, not just opportunity costs. Other explanations for our findings, like changes in school quality, migration, or demographics, receive less empirical support.

Suggested Citation

  • Elizabeth U. Cascio & Ayushi Narayan, 2015. "Who Needs a Fracking Education? The Educational Response to Low-Skill Biased Technological Change," NBER Working Papers 21359, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:21359
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    More about this item

    JEL classification:

    • I20 - Health, Education, and Welfare - - Education - - - General
    • J2 - Labor and Demographic Economics - - Demand and Supply of Labor
    • J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • Q33 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Resource Booms (Dutch Disease)
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population

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