NATURAL RESOURCE, REGIONAL GROWTH, AND HUMAN CAPITAL ACCUMULATION

The dissertation research will comprise three essays on the topic of the resource curse hypothesis and its mechanisms. The phenomenon of low economic growth in resource-rich regions is recognized as the “resource curse”. These essays will contribute to an understanding of the regional resource-growth relation within a nation. Essay one tests the resource curse hypothesis at the U.S. state level. With a system of equations model, I decompose the overall resource effect to account for the two leading explanations — crowding-out and institution effects, thus investigate whether the institutions mediate the crowding-out effects. I did not find evidence of an overall negative effect on growth by resource wealth. Both the crowding-out and institution appear present, but they offset: the resource boom crowds out industrial investments, but good institutions mitigate the overall effect. Resources do reduce growth in states with low-quality institutions, including Louisiana, Oklahoma, and Texas. Essay two compares the effects of resource revenues on the economic growth and growth-related factors across Chinese provinces and American states, using panel data from 1990 to 2015. With the Instrumental Variable (IV) strategy, I show that regions with higher resource revenues grow faster than other regions in both China and the U.S. The positive resource effect is larger and more statistically significant in the U.S. Further testing impacts of three resource-related policies in China, e.g. the market price reform, the fiscal reform, and the Western Development Strategy, I show that the market price reform together with the privatization process on coal resources contribute the positive resource effect in China. Though strong and positive resource – growth relations appear in both countries, evidence also suggests consistent negative resource effects on certain growth-related factors in both countries, such as educational attainments and R&D activities. Essay three explores the schooling response to the oil and gas boom, taking advantage of timing and spatial variation in oil and gas well drilling activities. Development of cost-reducing technologies at the time of higher crude oil and natural gas prices in the early 2000s has accelerated shale oil and gas extraction in the United States. I show that intensive drilling activities have decreased grade 11 and 12 enrollment over the 14 year study window − approximately 36 fewer students per county on average and overall, 41,760 fewer students across the 15 states enrolled considered in the analysis. On average, with one additional oil or gas well drilled per thousand initial laborers, grade 11 and 12 enrollment would decrease 0.24 percent at the county level, all else equal. I investigate heterogeneous effects and show that the implied effect of the boom is larger in states with a younger compulsory schooling age requirement (16 years of age instead of 17 or 18), lower state-level effective tax rate on oil and gas productions, traditional mining, non-metro, and persistent poverty counties

Sixty Years of Boom and Bust: The Impact of Oil in North Dakota, 1958-2018

In the 1950s, North Dakota experienced its first oil boom in the Williston Basin, on the western side of the state. The region experienced unprecedented social and economic changes, which were carefully documented in a 1958 report by four researchers at the University of North Dakota. Since then, western North Dakota has undergone two more booms, the most recent from 2008 to 2014. Sixty Years of Boom and Bust republishes the 1958 report and updates its analysis by describing the impact of the latest boom on the region’s physical geography, politics, economics, and social structure. Sixty Years of Boom and Bust addresses topics as relevant today as they were in 1958: the natural and built environment, politics and policy, crime, intergroup relations, and access to housing and medical services. In addition to making hard-to-find material readily available, it examines an area shaped by resource booms and busts over the course of six decades. As a result, it provides unprecedented insight into the patterns of develop- ment and the roots of the challenges the region has faced. Kyle Conway is an associate professor of communication at the University of Ottawa.https://commons.und.edu/press-books/1013/thumbnail.jp

Essays on Household Finances, Consumption & Individual Mental Health

Chapter I: We exploit the spatial and temporal variation of the staggered introduction of interstate banking deregulation across the U.S. to study the relationship between credit constraints and consumption of durables. Using the American Housing Survey from 1981 to 1989, we link the timing of these reforms with evidence of a credit expansion and household responses on many margins. We find evidence that low-income households are more likely to purchase new appliances after the deregulation. These durable goods allowed households to consume less natural gas and spend less time in domestic activities after the reforms. Chapter II: We explore the effects of hydraulic fracking booms on individual mental health by exploiting geological variation across U.S. shale plays. Utilizing a difference-in-differences specification to infer mental health outcomes, we find evidence that fracking leads to general declines in mental wellbeing. Coefficient results associated with depression, bad mental days, and above average bad days are positive and robust, indicating a negative impact of the boom-and-bust cyclical natural on mental health for an entire population. We also find some evidence suggesting individuals are more prone to alcohol abuse following a fracking boom. Estimating the heterogeneous treatment effects of subgroups within our sample pool, we shed some light on which demographics are more susceptible to experienced worsened mental health conditions spurred by the implementation of intense local fracking. Effects are largest and most consistent for those who self-reported as: (i) married, widowed, or single (associated with marital status); (ii) unemployed, a homemaker, or a student (associated with employment status), and (iii) female (relative to male counterparts). Chapter III: Literature investigating the impact of credit constraints on durable good consumption has been expanding rapidly. This paper looks at the elimination of auto loan cramdowns for Chapter 13 bankruptcy proceedings on three outcomes related to automobiles: asset value over time, number of autos in the household, and loan-to-value (LTV) ratio of new autos. Using a difference-in-differences framework based on a state’s historical use of Chapter 13 bankruptcy, we show that moneylenders increase lending to households as a result of lower credit risk following the reform. Further, as a proxy measurement for discrimination, we add wealth and race interactions to our main model and find positive, robust treatment effects of cramdown elimination on autos for low-asset and Black or African American households. Together, these results may indicate that lower risk to lenders leads to more lending across society in terms of equity, inclusion, and diversity

Essays on the Determinants of Human Capital Investment

The strength of the overall economy depends critically on the human capital -- the knowledge and skills -- of the workers in that economy. Investment in education is a central way for individuals to acquire human capital. The acquisition of human capital through education can also provide an important signal of individual ability, and can otherwise be rewarded with better labor market outcomes and opportunities. This dissertation explores important determinants of human capital investment by examining key incentives that influence the decision to invest in a college education. In the first study, I examine the college educational, earnings, and employment responses to local labor demand shocks brought about by recent innovations in horizontal drilling and hydraulic fracturing. I find that a boom in fracking production within a county causes a reduction in college enrollment rates at four-year institutions, an increase in earnings, and an increase in employment for both men and women, with stronger effects for men. The decline in college enrollment during a boom is largely reversed as fracking production slows within a county. Educational attainment, however, remains persistently low for cohorts who experience the biggest enrollment declines. Workers who never attend college experience relatively larger earnings and employment gains, when compared to college-educated workers. These findings reveal that fracking-induced shifts in labor demand raise the opportunity cost of, and reduce the relative returns to, college. In the second study, I analyze how new fracking production at varying distances from a particular county affects earnings, employment, and college enrollment within that county. I find that new fracking production up to 60 miles away generates positive earnings and employment gains within a county, most notably for non-college-educated men. New fracking production within 40 miles of a county is also associated with reductions in enrollments at two-year and four-year institutions. Beyond a distance of 60 miles, I find little evidence that new fracking production affects earnings, employment, or college enrollment. These findings have important implications for many counties throughout the United States, even if they do not engage in fracking, but are especially relevant for the top-producing and surrounding counties who account for the vast majority of the expansive increase in fracked oil and gas production over the last two decades. In the final study, I examine the effect of unilateral divorce laws on college attainment. Exploiting state variation in the adoption of unilateral divorce laws, I show that both women and men are less likely to report having a bachelor\u27s degree in states that adopted unilateral divorce laws. This reduction in human capital investment occurs in states with community property laws, where the law requires an even split of the couple\u27s assets in the event of a divorce and is most pronounced for white women and white men. I find no distortionary effects of unilateral divorce laws on the human capital decisions of black men or black women, even in states with community property laws

Beyond Science and Hysteria: Reality and Perceptions of Environmental Justice Concerns Surrounding Marcellus and Utica Shale Gas Development

The debate surrounding the use of hydraulic fracturing (also known as “fracking” or “HF”) to extract natural gas from the Marcellus and Utica shale deposits is often characterized as a tension between economic development and environmental risks. But frequently missing from this dichotomy is the fact that the concerns of many who oppose HF use extend beyond the purely “environmental,” and also include concerns about issues such as “the natural resource curse” and losing autonomy. These concerns ring of “environmental justice” rather than “environmentalism.” Environmental justice espouses the belief that no group should bear disproportionate environmental consequences resulting from industrial activity, and that people affected by industrial activity should be meaningfully involved in implementation. Although some federal and state policies acknowledge principles of environmental justice, it has yet to be meaningfully incorporated into any legal framework in the United States. This Article argues that a nuanced characterization of the HF controversy should include a more robust discussion of both environmental justice and discourse in order to account for the inordinate burden residents of Appalachia have historically borne in fossil fuel production. Part I examines relevant regional economic and social dynamics, including the natural resource curse, Appalachia’s unique vulnerabilities, efforts to portray opponents of shale gas development as “anti-science,” and the environmental justice movement’s relationship to extractive industries. Part II reviews the use of modern HF technology and applicable legal frameworks in West Virginia, Pennsylvania, Ohio, and New York. Part III argues that across Ohio, Pennsylvania, and West Virginia, environmental justice issues have arisen from shale gas development, including problems stemming from information asymmetries, power asymmetries, and limited access to justice. In Part IV, the Article argues that the “anti-science” portrayal of shale gas opponents is unjustified, and that such “discourse-framing” obfuscates the actual costs and limitations on benefits of HF use, and thus, becomes an environmental justice issue itself. Part IV also argues that environmental justice concerns shaped public sentiment in New York, and that the resulting “moral outrage” added to New York’s policy decision to ban HF altogether. In Part V, the Article suggests that ideas which transcend the study of “moral outrage”/risk assessment and environmental justice advocacy may offer a way forward

Scales over Shale: How Pennsylvania Got Fracked

Shale gas has become one of Pennsylvania\u27s major resources in recent years and the gas boom has proceeded in spite of uncertainty over the environmental risks of its production process. This thesis argues that location alone cannot explain why shale gas boomed in Pennsylvania. Using interviews with corporate and state executives, I argue that the scalar dimensions of the neoliberal environmental governance of shale gas were critical to understanding why shale gas boomed in Pennsylvania. These actors supported the preemption of local scales of governance by the state as a scalar fix for capital accumulation from shale gas development. They also legitimated the scalar fix by assembling a neat stack of scale frames that made shale gas seem to benefit everyone. These scale frames made shale gas appear as if it would provide local employment, regional supplies of cheap gas, national energy security, abundant gas for tight global markets, and a mitigating strategy for global climate change. In arguing this point, I present a history of how shale gas became a resource that outlines the critical role of the state in that proces

Regulatory Obsolescence Through Technological Change in Oil and Gas Extraction

Extraction of oil and gas from unconventional resources, recently enabled by technological innovations, revolutionized national and global markets. However, exploration and production still proceed under legacy regulations, mostly promulgated at the state level. The mismatch of modern production realities and historic regulatory structures creates opportunities for reducing conflicts that diminish economic value. This Article identifies regulations that originated under conventional extraction, and often enhance productivity in that setting, but create waste when applied to unconventional resources. Then, it identifies contractual solutions that have evolved as resource owners and extraction firms have adapted to new technologies. Contractual innovations help inform directions for regulatory reform