Economics
The impacts of lower natural gas prices on jobs in the U.S. manufacturing sector
Document Type
Article
Abstract
The recovery of the U.S. manufacturing sector following the 2008–2009 economic recession coincided with a sharp drop in natural gas prices. To determine whether a causal connection in fact exists, we use confidential plant-level data for 1972–2012 to estimate the employment effects of changes in natural gas and other energy prices. Previous analyses have used aggregated data and failed to control for multiple drivers of employment dynamics, such as other input costs. We show that controlling for these factors substantially diminishes the effects of natural gas and electricity prices on manufacturing employment. Accounting for the direct effects of natural gas prices as well as the indirect effects via electricity prices, we estimate that the decline in natural gas prices between 2007 and 2012 raised overall manufacturing employment by 0.6 percent, and for gas-intensive industries, by 1.8 percent.
Publication Title
Energy Journal
Publication Date
2019
Volume
40
Issue
5
First Page
169
Last Page
193
ISSN
0195-6574
DOI
10.5547/01956574.40.5.wgra
Keywords
employment effects, energy boom, U.S. manufacturing
Repository Citation
Gray, Wayne; Linn, Joshua; and Morgenstern, Richard, "The impacts of lower natural gas prices on jobs in the U.S. manufacturing sector" (2019). Economics. 106.
https://commons.clarku.edu/faculty_economics/106