Oil & gas induced economic fluctuations and self-employment

Abstract

This paper exploits oil and gas activity generated by recent technological advancements to understand the effect of localized boom and busts on self-employment. We find a positive contemporaneous impact on self-employment, mainly driven by self-employment in non-mining industries. We also find that self-employment is pro-cyclical, meaning that self-employment increases during oil and gas booms and contracts during the bust. Finally, results suggest that self-employment explains an economically meaningful share of the employment adjustment; specifically we estimate that about 11% of the employment adjustment can be explained by self-employed workers, a group which makes up about 9% of total employment.