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What Goes Up Must Come Down? A Case Study of the Recent Oil and Gas Employment Cycle in Louisiana, North Dakota and Oklahoma

Rickman, Dan S. and Wang, Hongbo (2018): What Goes Up Must Come Down? A Case Study of the Recent Oil and Gas Employment Cycle in Louisiana, North Dakota and Oklahoma.

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Abstract

The recent boom and bust in the oil and natural gas sector provide a unique opportunity to assess whether the employment impacts of energy development are symmetric across the differing phases of the energy cycle. This study uses the synthetic control method to examine the boom and bust effects for three key oil and natural gas producing states: Louisiana, North Dakota, and Oklahoma. The three states are chosen as case studies because of their relative intensity in oil production in addition to their production of natural gas. Because of Hurricane Katrina, we examine Louisiana sans New Orleans. The three states also most closely match each other in cyclic movements relative to other energy producing states. The results reveal differing employment impacts across the three states in both the short and long run, with the differences at least in part suggested to be connected to state and local government education expenditure responses to the boom and bust, particularly in terms of their effects on public school teacher salaries.

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