The Impact of Shale Energy on Population Dynamics, Labor Migration, and Employment

Abstract

This paper is designed to determine whether producing oil and gas via shale has an economically significant effect on population migration dynamics and on the labor market in terms of the number of employed individuals, the number of establishments, total wages, and average annual pay per person in twenty-six counties in Ohio and Pennsylvania, USA. The analysis incorporates migration inflow and outflow between producing and nonproducing counties. The results of the analysis show that the counties that engage in shale gas extraction saw a negative impact on net migration but a much larger positive impact on labor market outcomes. Specifically, the number of jobs is higher by 2.4%, the number of establishments is higher by 1.1%, total wages are 3% more and the average annual pay is 1.5% more in producing counties after shale. The analysis reveals a small but statistically significant negative impact on migration, as shale regions experienced some migration outflows.