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Is There a Resource Curse in the US and Canada? Evidence from the Shale Revolution

Author

Listed:
  • Steven Yamarik

    (California State University Long Beach)

  • Florian Horky

    (National Bank of Slovakia)

  • Jarko Fidrmuc

    (Zeppelin University)

Abstract

This paper uses the shale revolution as a natural experiment to test the resource curse in American states and Canadian provinces. We use a comprehensive set of unproved reserves of unconventional gas and oil plays for North America in 2010 to identify the impact of resource dependence on state-level economic growth. We estimate a growth regression with mining production (resource dependence), corruption and other long-run determinants. Using least squares, we find no significant link between resource dependence and state-level economic growth. However, by instrumenting resource dependence, we find evidence of a resource curse in that greater mining production (and employment) leads to lower state-level growth. Our resource curse finding is robust to fracking bans and moratoriums, alternative GDP measures and resource abundance (proved reserves). In tests for indirect transmission mechanisms, we find that greater mining activity reduces educational attainment, non-resource tax revenue, and trade openness in North America and increases the price of nontradeables relative to tradeables in the US.

Suggested Citation

  • Steven Yamarik & Florian Horky & Jarko Fidrmuc, 2026. "Is There a Resource Curse in the US and Canada? Evidence from the Shale Revolution," Working and Discussion Papers WP 8/2026, Research Department, National Bank of Slovakia.
    • Handle: RePEc:svk:wpaper:1144
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    More about this item

    JEL classification:

    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • O51 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - U.S.; Canada
    • 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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