Economic Impacts of Unconventional Oil and Gas Development
We review the literature that analyzes the local economic impacts of an increase in unconventional oil and gas development, including impacts on wages and royalty income, employment, and the effects on long-term growth and economic development.
Figures
Figure 1. Estimated Percent Change in Wages and Earnings for Studies Reviewed
Notes: Asterisks indicate that a study analyzed wages. Those without asterisks studied earnings. Different shades of color indicate a range (e.g., Bartik et al. reported an impact of 4.4% to 6.9%).
Key findings
- We examine 32 studies, focusing on studies that analyze these effects at a local level, such as townships and counties, as opposed to national changes, though a few studies look at state-wide effects.
- We conclude that there is strong evidence for local employment gains with an increase in unconventional oil and gas development, though the magnitude varies. We find that some studies appear likely to overestimate these effects.
- There is strong evidence of an increase in wages (though a few studies find that this increase may be temporary), and increases in royalty income, depending on mineral rights ownership.
- The literature on long-term development effects provides less consistent evidence, with several finding indication of a “resource curse,” or a negative long-term impact, and others finding no evidence of such an effect.
