The Short-Run and Long-Run Effects of Resources on Economic Outcomes: Evidence From the United States 1936-2015
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.
The authors thank participants at the 2013 Economic History Association Meetings, the 2014 Queens Economic History Workshop, 2015 and 2017 AERE sessions at the ASSA, Brown University, Miami University, Vanderbilt University, Clemson University, and Michael Alexeev, Hunt Allcott, Lee Alston, Daniel Berkowitz, Ian Keay, Marvin McInnis, and Gavin Wright for helpful comments. Ellis Goldberg, Erik Wibbels and Eric Mvukiyehe generously shared their data. Avery Calkins and Alex Weckenman provided excellent research assistance. The authors gratefully acknowledge financial support from Heinz College at Carnegie Mellon University. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research.