Working Paper: NBER ID: w24695
Authors: Karen Clay; Margarita Portnykh
Abstract: This paper draws on a new state-level panel dataset and a model of domestic Dutch disease to examine the short-run and long-run effects of oil & natural gas, coal, and agricultural land endowments on state economies during 1936-2015. Using a flexible shift-share estimation approach, where the shift is national resource employment and the share is state resource endowment, we find that different resources had different short-run effects in different time periods, across increases and decreases in resource employment, and across different outcomes. Using long differences, we find that long-run population growth was an important margin of adjustment over 1936-2015. States with larger coal and agricultural endowments per square mile experienced significantly slower population growth than states with smaller endowments per square mile. Resource endowments had no effect on long-run growth in per capita income.
Keywords: natural resources; economic outcomes; population growth; per capita income; shift-share estimation
JEL Codes: J2; N12; O4; Q24; Q43
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| increases in national coal employment (L71) | growth in population (J11) |
| increases in agricultural employment (J43) | population growth (J11) |
| declining agricultural employment (J43) | population declines (J11) |
| larger coal and agricultural endowments (N51) | slower relative population growth (J11) |
| resource endowments (Q32) | long-run effects on per capita income growth (F62) |