Are Resource Booms a Blessing or a Curse? Evidence from People (not Places)

Journal of Human Resources

Posted: 9 Mar 2021

See all articles by Grant Jacobsen

Grant Jacobsen

University of Oregon - School of Planning, Public Policy, and Management

Dominic P. Parker

University of California, Santa Barbara (UCSB) - Donald Bren School of Environmental Science & Management

Justin Winikoff

affiliation not provided to SSRN

Date Written: September 1, 2020

Abstract

We provide the first estimates of the long-run income effects of temporary resource booms on people, rather than places, focusing on the U.S. oil boom and bust of the 1980s. Using household-level longitudinal data, we find positive effects during the boom period and negative effects during the bust period. The cumulative effect through 2012 was arguably negative when restricting the sample to prime working years (<55) and unambiguously positive otherwise because the boom delayed retirement. The evidence suggests the boom was ultimately a curse for the average household. It failed to generate net income gains during prime age and its volatility caused costly income-smoothing later in life.

Keywords: resource curse, resource boom, oil, volatility, retirement

JEL Classification: Q33, J26, J30

Suggested Citation

Jacobsen, Grant and Parker, Dominic P. and Winikoff, Justin, Are Resource Booms a Blessing or a Curse? Evidence from People (not Places) (September 1, 2020). Journal of Human Resources, Available at SSRN: https://ssrn.com/abstract=3780739

Grant Jacobsen (Contact Author)

University of Oregon - School of Planning, Public Policy, and Management ( email )

1280 University of Oregon
Eugene, OR 97403
United States

Dominic P. Parker

University of California, Santa Barbara (UCSB) - Donald Bren School of Environmental Science & Management ( email )

4670 Physical Sciences North
Santa Barbara, CA 93106-5131
United States

Justin Winikoff

affiliation not provided to SSRN

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