The Economic Impact of Shale Gas Development: A Natural Experiment along the New York / Pennsylvania Border

Abstract

We investigate local economic impacts of shale gas development using the natural experiment of the discontinuity in regulation caused by New York's 2008 moratorium on fracking. Using county- and zip-code-level data for 2001–2013 to examine differences in New York and Pennsylvania counties before and after the moratorium, we find that shale gas development has a positive local impact on employment and wages in the natural resource, mining, and construction sectors and an offsetting reduction in employment in the manufacturing sector. Overall, we find no statistically significant local effects on total employment or on wages.