Oil and gas boomtowns and occupations: What types of jobs are created?

Abstract

Innovation in hydraulic fracturing methods and micro-seismic technology, along with higher energy prices until 2014, led to oil and gas booms in various U.S. shale plays. While this appears to be a positive event for the country, it is unclear whether and how local communities benefit in the long-term from unconventional gas development. This paper evaluates the impact of oil and gas development on occupation-specific job growth in resource-intensive economies using a unique dataset with annual county employment at the 2- and 5-digit 2010 Standard Occupation Classification (SOC) code combined with education, experience, and training requirements from the O*NET database. Using a first-difference methodology, we find that oil and gas booms have a significant positive impact on occupational job growth in derrick, rotary drill, and service unit operators, truck drivers, secretaries, and engineers, with human capital requirements ranging from less than a high school diploma to at least a bachelor's degree. While occupations associated with oil and gas development and their human capital requirements vary, the results suggest that many of these occupations require workers to have vocational and technical training in addition to a high school diploma, thereby indicating greater demand for workers with intermediate skills in affected areas. Changes in human capital composition resulting from oil and gas development could have significant impacts on a region's ability to respond to energy busts and affect its economic resilience.