The USA has recently experienced an unprecedented boom in domestic, on-shore oil and gas production via unconventional drilling technologies like hydraulic fracturing and directional drilling. Community leaders and policy-makers claim that this boom holds much promise to reverse many social and economic challenges faced by rural, non-amenity counties. Chief among these is human capital flight—often called the “rural brain drain”—and the loss of working-age population. This analysis examines the socio-demographic consequences of the oil and gas boom by assessing if the boom can stall or reverse human capital flight and the loss of working-age population from rural, non-amenity counties. Using a large data set of U.S. counties and difference-in-difference models, we find that the oil and gas boom is associated with modest increases in the proportion of county population with a high school education or less and modest losses in the proportion of county population with a college education. The boom likely increased the proportion of working age population, particularly males 20–34. Overall, our results suggest that oil and gas development has a limited effect on human capital and age composition in non-amenity, rural counties. Broadly, we expect that oil and gas development will do little to address long-run, structural demographic challenges facing rural America.
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There are parallels between the current discourse around UOGE and the dialogue around biofuels from the mid- 2000s. In the case of the latter, biofuels were often touted as the cornerstone of a new era of economic development for rural American, though many economic benefits failed to materialize (e.g. Glenna and Cahoy 2009; Carolan 2009; Selfa et al. 2011; Carriquiry 2007).
Although non-amenity rural areas tend to experience population loss, some out-migrants do return. Reichert et al. 2014 suggest that social and familial ties are an important pull factor for return migration. Retirees are another source of in-migration for some low amenity, rural counties (Brown et al. 2011; Longino 1988).
We cannot formally test the parallel trends assumption because of data availability limitations. Ideally, our use of causal inference methods (i.e., entropy balancing) mitigates against this potential problem (Kreif et al. 2016).
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Mayer, A., Malin, S.A. & Olson-Hazboun, S.K. Unhollowing rural America? Rural human capital flight and the demographic consequences of the oil and gas boom. Popul Environ 39, 219–238 (2018). https://doi.org/10.1007/s11111-017-0288-9
- Brain drain
- Age composition
- Hydraulic fracturing
- Rural development