A new GLO Discussion Paper finds that the fracking innovations who had revolutionized the United States oil and gas industry and facilitated a boom in energy production were responsible for positive effects on the labor markets, in particular outside the oil and gas industry.
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GLO Discussion Paper No. 400, 2019
Do Workers Benefit from Resource Booms in Their Home State? Evidence from the Fracking Era – Download PDF
by Winters, John V. & Cai, Zhengyu & Maguire, Karen & Sengupta, Shruti
GLO Fellows John Winters & Zhengyu Cai
Author Abstract: Fracking innovations revolutionized the United States oil and gas industry and facilitated a boom in energy production in states with oil and gas resources. This paper examines effects of oil and gas booms within a state on individual employment and earnings. To account for endogenous migration decisions, we instrument for oil and gas production in workers’ state of residence via the predicted percent of oil and gas employment in their state of birth. We find statistically significant and economically meaningful positive effects. The bulk of the effects accrue to workers employed outside the oil and gas industry indicating sizable spillovers.
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