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Labor market impacts of U.S. tight oil development: The case of the Bakken

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  • Miljkovic, Dragan
  • Ripplinger, David

Abstract

There has been a recent boom in natural gas and oil production in the US due to high energy prices and technological advances in hydraulic fracturing and horizontal drilling. While North Dakota oil production has increased significantly since 2005 with the development of Bakken formation, the impact on the rest of the economy including agriculture, historically the largest industry in North Dakota, has received little attention. We employ a variant of the Corden-Neary resource development model to test the impact of the oil boom in North Dakota caused by technical change on employment and wages in two tradable sectors of the state economy: agriculture and energy, alongside the rest of the state's economy, using a Vector Error Correction (VEC) model marking the very first use of the dynamic vector autoregression (VAR) analysis in this theoretical framework.

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  • Miljkovic, Dragan & Ripplinger, David, 2016. "Labor market impacts of U.S. tight oil development: The case of the Bakken," Energy Economics, Elsevier, vol. 60(C), pages 306-312.
    • Handle: RePEc:eee:eneeco:v:60:y:2016:i:c:p:306-312
    DOI: 10.1016/j.eneco.2016.10.007
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    Cited by:

    1. Guettabi, Mouhcine & James, Alexander, 2020. "Who benefits from an oil boom? Evidence from a unique Alaskan data set," Resource and Energy Economics, Elsevier, vol. 62(C).
    2. Johanna Richter & Alliana Salanguit & Alexander James, 2018. "The (Uneven) Spatial Distribution of the Bakken Oil Boom," Land Economics, University of Wisconsin Press, vol. 94(4), pages 577-592.
    3. Rickman, Dan & Wang, Hongbo, 2020. "What goes up must come down? The recent economic cycles of the four most oil and gas dominated states in the US," Energy Economics, Elsevier, vol. 86(C).
    4. Newell, Richard G. & Raimi, Daniel, 2018. "The fiscal impacts of increased U.S. oil and gas development on local governments," Energy Policy, Elsevier, vol. 117(C), pages 14-24.
    5. Dragan Miljkovic & Cole Goetz, 2020. "Destabilizing role of futures markets on North American hard red spring wheat spot prices," Agricultural Economics, International Association of Agricultural Economists, vol. 51(6), pages 887-897, November.
    6. Luis Mª Abadie & José M. Chamorro, 2017. "Valuation of Real Options in Crude Oil Production," Energies, MDPI, vol. 10(8), pages 1-21, August.
    7. Gittings, R. Kaj & Roach, Travis, 2020. "Who Benefits from a Resource Boom? Evidence from the Marcellus and Utica Shale Plays," Energy Economics, Elsevier, vol. 87(C).
    8. Vatsa, Puneet & Hu, Baiding, 2021. "Intra-federal effects of oil prices: Evidence from Canada," Resources Policy, Elsevier, vol. 74(C).
    9. Miljkovic, Dragan & Goetz, Cole, 2020. "The effects of futures markets on oil spot price volatility in regional US markets," Applied Energy, Elsevier, vol. 273(C).
    10. Onur Sapci, 2022. "The Impact of Shale Energy on Population Dynamics, Labor Migration, and Employment," Energies, MDPI, vol. 15(22), pages 1-17, November.

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    More about this item

    Keywords

    Energy boom; Oil; Labor market; Employment; Wages; Natural resource curse; Dutch disease;
    All these keywords.

    JEL classification:

    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • J43 - Labor and Demographic Economics - - Particular Labor Markets - - - Agricultural Labor Markets
    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products

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