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Who Needs a Fracking Education? The Educational Response to Low-Skill Biased Technological Change

Elizabeth U. Cascio, Ayushi Narayan

NBER Working Paper No. 21359
Issued in July 2015, Revised in February 2019
NBER Program(s):Children, Economics of Education, Environment and Energy Economics, Labor Studies

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.

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Document Object Identifier (DOI): 10.3386/w21359

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