Unconventional Natural Gas Extraction: Rural Poverty, Income, & Population
Presented by:
Elizabeth Anderson
Practice Job Talk
Department of Agricultural and Applied Economics
University of Wisconsin-Madison
Wednesday, September 23, 2026
12:00 pm-1:15 pm
Taylor-Hibbard Seminar Room (Rm103)
Since the early 2000s, fracking of natural gas has greatly increased domestic supply in the US; however, economists have wondered about the local economic impacts. Using grid data at the 0.46 mi2 (1.2 km2) level and tract-level data along with fracking well location and drilling date information from seven Rust Belt and Middle Atlantic states, I find that the presence of a fracking well is associated with a 1.7 decrease in people in the lowest three income deciles, a 3 percent increase in median household income, and a 5.7 percent increase in income per capita in my preferred specification for 2019. The reduction of people in lower-income brackets is robust to both data sources and some specifications, suggesting that benefits of fracking may accrue to the least wealthy individuals. This impact levels off after several years but remains positive compared to pre-fracking income and poverty rates. Given the time period in which fracking began to occur in this region, my findings suggest that fracking may have assisted the poorest rural districts with weathering the shock of the Great Recession. In addition, I find no evidence that fracking is associated with long-term reductions in unemployment, county-level population, or with permanent decreased out-migration and in-migration. Coupled with the above income and poverty results, my findings suggest that the benefits accrued to local residents, perhaps by way of royalty payments rather than direct fracking-related employment.