Geographic Dispersion of Economic Shocks: Evidence from the Fracking Revolution

(formerly "Where is my Fracking Job? Measuring Local Employment and Income Spillovers from the Shale Gas Boom")

 

James Feyrer, Erin T. Mansur, and Bruce Sacerdote


American Economic Review, Volume 107, Issue 4, April 2017, Pages 1313-1334.    Data
Working Paper, November 2016.
NBER Working Paper 21624, October 2015.
Dartmouth Press Release, November 2015.

Abstract:

 

We track the geographic and temporal propagation of local economic shocks from new oil and gas production generated by hydrofracturing. Each million dollars of new production produces $80,000 in wage income and $132,000 in royalty and business income within a county. Within 100 miles, one million dollars of new production generates $257,000 in wages and $286,000 in royalty and business income. Roughly two-thirds of the wage income increase persists for two years. Assuming no general equilibrium effects, new extraction increased aggregate US employment by as many as 640,000, and decreased the unemployment rate by 0.43 during the Great Recession.