Causal Effects of the Fracking Boom on Long‐Term Resident Workers

Winters, John. V., Zhengyu Cai, Karen Maguire, and Shruti Sengupta. 2021 
Journal of Regional Science, 61(2), 387-406.

We find statistically significant and economically meaningful positive effects of the oil and gas boom for long-term resident workers, those who were born in and reside in their home state.

Abstract

Horizontal drilling innovations revolutionized the U.S. oil and gas industry and facilitated a boom in production in the mid-2000s in regions with shale and tight-sands reservoirs. This paper examines the effects of the boom on individual employment and earnings within boom states. We account for endogenous migration decisions by using a novel instrument for oil and gas production in workers' state of residence. We find statistically significant and economically meaningful positive effects of the oil and gas boom for long-term resident workers, those who were born in and reside in their home state.