Local Labor Market Shocks and Earnings Differentials: Evidence From Shale Oil and Gas Booms

34 Pages Posted: 18 Jan 2018 Last revised: 17 Oct 2019

See all articles by Gregory Upton

Gregory Upton

Louisiana State University, Baton Rouge

Han Yu

Dalton State College

Date Written: March 14, 2019

Abstract

We show that a labor demand shock to specific workers (male workers with high school education) in a specific industry (oil and gas sector) can significantly impact earnings differentials within sectors not directly impacted by the productivity shock. Specifically, we estimate that areas impacted by the shale boom experienced a 3% decrease (2.7% increase) in the high-/low-skilled (male/female) earnings differential relative to unaffected areas. The corresponding effects on employment differentials are -4.4% and 3.7%, respectively. These effects are also observed within sectors not directly impacted by the boom. Results highlight the importance of considering the differential effects of technology shocks by education and gender in studying earnings inequality.

Suggested Citation

Upton, Gregory and Yu, Han, Local Labor Market Shocks and Earnings Differentials: Evidence From Shale Oil and Gas Booms (March 14, 2019). USAEE Working Paper , Available at SSRN: https://ssrn.com/abstract=3104693 or http://dx.doi.org/10.2139/ssrn.3104693

Gregory Upton (Contact Author)

Louisiana State University, Baton Rouge ( email )

Baton Rouge, LA 70803
United States

Han Yu

Dalton State College ( email )

Dalton, GA 30720
United States

HOME PAGE: http://www.hanyuecon.com

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