Oil & Gas Induced Economic Fluctuations and Self-Employment

40 Pages Posted: 21 Jul 2020 Last revised: 8 Sep 2021

See all articles by Bulent Unel

Bulent Unel

Louisiana State University, Baton Rouge

Gregory Upton

Louisiana State University, Baton Rouge

Date Written: September 7, 2021

Abstract

We investigate effects of plausibly exogenous variation in the value of oil and natural gas production in local economies on self-employment in the United States. We find that self-employment is procyclical, i.e. self-employment increases during a business cycle expansion and is reduced during a contraction. This effect comes entirely from unincorporated self-employed workers (in lieu of incorporated self-employment). We also find that self-employment explains an economically meaningful share of the employment adjustment; point estimates suggest that approximately 8 to 9 percent of the employment adjustment comes from unincorporated self-employed individuals - a group that makes up about 6 percent of total employment.

Keywords: Entrepreneurship, Oil and Natural Gas, Hydraulic Fracturing, Incorporated Self-employment, Unincorporated Self-employment

JEL Classification: J24, L26, M13, Q33, Q35

Suggested Citation

Unel, Bulent and Upton, Gregory, Oil & Gas Induced Economic Fluctuations and Self-Employment (September 7, 2021). USAEE Working Paper No. 20-461, Available at SSRN: https://ssrn.com/abstract=3656373 or http://dx.doi.org/10.2139/ssrn.3656373

Bulent Unel

Louisiana State University, Baton Rouge ( email )

Department of Economics
2134 Patrick F. Taylor Hall
Baton Rouge, LA 70803
United States

Gregory Upton (Contact Author)

Louisiana State University, Baton Rouge ( email )

Baton Rouge, LA 70803
United States

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