Local Labor Market Shocks and Earnings Differentials: Evidence From Shale Oil and Gas Booms
39 Pages Posted: 18 Jan 2018 Last revised: 28 Mar 2019
Date Written: March 14, 2019
In this research, we show that labor demand shocks to specific workers (male workers with high school education) in a specific industry that makes up a relatively small share of employment (oil and gas sector) can have significant impacts on earnings differentials both economy wide and within unrelated sectors. We estimate that a million dollars of new oil and gas production per person is associated with a 6.4% decrease in the college/high school earnings differential, and a 6.5% increase in the male/female earnings differential. We decompose the possible channels through which a productivity shock to the oil and gas sector can impact regional earnings differentials.
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