Moving to Economic Opportunity: The Migration Response to the Fracking Boom
Saturday, November 5, 2016
Columbia Ballroom (Washington Hilton)
*Names in bold indicate Presenter
The fracking oil and gas boom has created large, localized economic shocks and corresponding wage increases for men with less than a college degree. Fracking can only occur in certain areas exogenously determined by geology, creating a unique setting to identify the migration behavior of low educated men, who have consistently been found in the previous literature to move less than more educated men. In this paper I characterize the reduced form migration response to fracking and find that young, unmarried, or moderately educated men were particularly responsive. To better understand differences in migration behavior across education groups, I use an instrumental variables (IV) approach to estimate migration elasticities and find suggestive evidence that among men, college graduates are twice as likely to migrate to higher wages as those without a college degree. These elasticities are insensitive to a range of potential confounding factors that could potentially threaten the validity of the IV assumption, suggesting that men with less education are less likely to move to economic opportunity. Given this result, I discuss how and when policy intervention might be welfare improving.