Working Paper: NBER ID: w21359
Authors: Elizabeth U. Cascio; Ayushi Narayan
Abstract: We explore the educational response to fracking, a recent technological breakthrough in the oil and gas industry, taking advantage of the timing of its diffusion and spatial variation in shale reserves. We show that fracking has significantly increased relative demand for less-educated male labor and high school dropout rates of male teens, both overall and relative to females. Our estimates imply that, absent fracking, the teen male dropout rate would have been 1 percentage point lower over 2011-15 in the average labor market with shale reserves, implying an elasticity of school enrollment with respect to earnings below historical estimates. Fracking increased earnings more among young men than teenage boys, suggesting that educational decisions respond to improved earnings prospects, not just opportunity costs. Other explanations for our findings, like changes in school quality, migration, or demographics, receive less empirical support.
Keywords: fracking; education; technological change; labor market; high school dropout
JEL Codes: I20; J2; J3; O33; Q33; R23
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Fracking (L71) | Increased relative demand for less-educated male labor (J49) |
| Increased relative demand for less-educated male labor (J49) | Higher high school dropout rates among male teens (I21) |
| Fracking (L71) | Higher high school dropout rates among male teens (I21) |
| Improved labor market prospects for young men (J49) | Educational decisions of young men (I21) |
| Perceived changes in the return to education (I26) | Educational decisions of young men (I21) |
| Fracking (L71) | Negligible effects on female educational outcomes (I24) |