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Who Wins in an Energy Boom? Evidence from Wage Rates and Housing

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  • Grant Jacobsen

    (University of Oregon)

Abstract

This paper presents evidence on the distributional effects of energy extraction by examining the recent U.S. energy boom. The boom increased local wage rates in almost every major occupational category. The increase occurred regardless of whether the occupation experienced a corresponding change in employment, suggesting a more competitive labor market that benefited local workers. Local housing values and rental prices both increased, thereby benefiting landowners. For renters, the increase in prices was completely offset by a contemporaneous increase in income. The results indicate that bans on drilling have negative monetary consequences for a large share of local residents.

Suggested Citation

  • Grant Jacobsen, 2016. "Who Wins in an Energy Boom? Evidence from Wage Rates and Housing," Upjohn Working Papers 17-271, W.E. Upjohn Institute for Employment Research.
    • Handle: RePEc:upj:weupjo:17-271
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    Cited by:

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    2. Guettabi, Mouhcine & James, Alexander, 2020. "Who benefits from an oil boom? Evidence from a unique Alaskan data set," Resource and Energy Economics, Elsevier, vol. 62(C).
    3. Upton, Gregory B. & Yu, Han, 2021. "Labor demand shocks and earnings and employment differentials: Evidence from the U.S. shale oil & gas boom," Energy Economics, Elsevier, vol. 102(C).
    4. Jason P. Brown, 2021. "Response of Consumer Debt to Income Shocks: The Case of Energy Booms and Busts," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 53(7), pages 1629-1675, October.
    5. Parra-Cely, Sergio & Zanoni, Wladimir, 2022. "The Labor Market Worsening Effects of a Resource Bust: Evidence from the Crude Oil Price Shock in Ecuador," IDB Publications (Working Papers) 12268, Inter-American Development Bank.
    6. Grant D. Jacobsen, 2019. "The impact of energy booms on local workers," IZA World of Labor, Institute of Labor Economics (IZA), pages 468-468, November.
    7. Andrew L. Owen, 2022. "The Fracking Boom, Labor Structure, and Adolescent Fertility," Population Research and Policy Review, Springer;Southern Demographic Association (SDA), vol. 41(5), pages 2211-2231, October.
    8. Hess, Joshua H. & Manning, Dale T. & Iverson, Terry & Cutler, Harvey, 2019. "Uncertainty, learning, and local opposition to hydraulic fracturing," Resource and Energy Economics, Elsevier, vol. 55(C), pages 102-123.
    9. Jayachandran, Seema & Chirakijja, Janjala & Ong, Pinchuan, 2019. "Inexpensive Heating Reduces Winter Mortality," CEPR Discussion Papers 13603, C.E.P.R. Discussion Papers.
    10. Rickman, Dan & Wang, Hongbo, 2020. "What goes up must come down? The recent economic cycles of the four most oil and gas dominated states in the US," Energy Economics, Elsevier, vol. 86(C).
    11. Nathaly M. Rivera, 2020. "Is Mining an Environmental Disamenity? Evidence from Resource Extraction Site Openings," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 75(3), pages 485-528, March.
    12. Max Harleman, 2023. "Compensating communities for industrial disamenities: The case of shale gas development," Economic Inquiry, Western Economic Association International, vol. 61(1), pages 10-34, January.
    13. Jason P. Brown & Timothy Fitzgerald & Jeremy G. Weber, 2019. "Does Resource Ownership Matter? Oil and Gas Royalties and the Income Effect of Extraction," Journal of the Association of Environmental and Resource Economists, University of Chicago Press, vol. 6(6), pages 1039-1064.
    14. Zhang, Haoran, 2023. "Coal busts and urban recovery: Evidence from China," Regional Science and Urban Economics, Elsevier, vol. 101(C).
    15. Unel, Bulent & Upton, Gregory B., 2023. "Oil & gas induced economic fluctuations and self-employment," Labour Economics, Elsevier, vol. 82(C).
    16. Weinstein, Amanda L. & Partridge, Mark D. & Tsvetkova, Alexandra, 2018. "Follow the money: Aggregate, sectoral and spatial effects of an energy boom on local earnings," Resources Policy, Elsevier, vol. 55(C), pages 196-209.
    17. Rivera, Nathaly M. & Loveridge, Scott, 2022. "Coal-to-gas fuel switching and its effects on housing prices," Energy Economics, Elsevier, vol. 106(C).
    18. Kuan‐Ming Huang & Xiaoli Etienne, 2021. "Impact of Marcellus and Utica shale exploitation on Ohio, Pennsylvania, and West Virginia Regional Economies: A synthetic control analysis," Papers in Regional Science, Wiley Blackwell, vol. 100(6), pages 1449-1479, December.
    19. Weinstein, Amanda & Partridge, Mark & Tsvetkova, Alexandra, 2017. "Follow the Money: How Does the Income Flow After an Energy Boom," MPRA Paper 77336, University Library of Munich, Germany.

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    More about this item

    Keywords

    NAFTA; oil; natural gas; hydraulic fracturing; fracking; resource extraction; labor market effects; resource curse; Dutch disease; wage rates; housing values; rental prices;
    All these keywords.

    JEL classification:

    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • Q33 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Resource Booms (Dutch Disease)
    • R31 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Housing Supply and Markets

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