Who Benefits From an Oil Boom? Evidence From a Unique Alaskan Data Set

Oil booms have been shown to enhance local employment and wages. But such conclusions reflect the aggregated experience of residents, commuters, and recent migrants alike. But from a local policy perspective, understanding how such economic booms affect existing resident populations is clearly important. This paper takes advantage of a unique data set that identifies labor market outcomes based off of an individual?s place of residence, rather than their place of work. Exploiting this feature of the data, we examine the effect of a major oil boom on employment and wage outcomes in the oil-rich North Slope Borough of Alaska. This analysis is juxtaposed with a more conventional one that relies on the use of Bureau of Economic Analysis (BEA) data, which is based off of where individuals work, regardless of where they live. Using a difference-in-difference estimation strategy, we find that the oil boom of the late 2000s generated significant economic gains. While the majority of the gains appear to have gone to temporary migrant workers, residents did experience some gains in the form of enhanced wages and employment. We conclude that the residential impact of resource booms may not be accurately reflected in BEA data.