Unhollowing rural America? Rural human capital flight and the demographic consequences of the oil and gas boom

Abstract

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.