{"title":"The Labor Market Worsening Effects of a Resource Bust: Evidence from the Crude Oil Price Shock in Ecuador","authors":"","doi":"10.1016/j.worlddev.2024.106730","DOIUrl":null,"url":null,"abstract":"<div><p>To evaluate the effects of a negative oil price shock on individual labor market outcomes, we leverage the interaction of exogenous changes in global oil prices with predetermined geographical variation in oil dependency across Ecuadorian cantons. Difference-in-differences estimates show a significant decline in wages and non-labor earnings, moderate adjustments in working hours, but no impact on labor market participation following the resource bust. Decreased labor demand from public and private sectors in oil-producing areas, along with increased exposure of informal workers to oil-price volatility, serve as the main mechanisms explaining our findings. While we observe occupational sorting, we cannot exclude the possibility of homogeneous effects across socio-demographic groups, nor the existence of industry and geographic spillover effects.</p></div>","PeriodicalId":48463,"journal":{"name":"World Development","volume":null,"pages":null},"PeriodicalIF":5.4000,"publicationDate":"2024-08-02","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"World Development","FirstCategoryId":"96","ListUrlMain":"https://www.sciencedirect.com/science/article/pii/S0305750X24002006","RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q1","JCRName":"DEVELOPMENT STUDIES","Score":null,"Total":0}
引用次数: 0
Abstract
To evaluate the effects of a negative oil price shock on individual labor market outcomes, we leverage the interaction of exogenous changes in global oil prices with predetermined geographical variation in oil dependency across Ecuadorian cantons. Difference-in-differences estimates show a significant decline in wages and non-labor earnings, moderate adjustments in working hours, but no impact on labor market participation following the resource bust. Decreased labor demand from public and private sectors in oil-producing areas, along with increased exposure of informal workers to oil-price volatility, serve as the main mechanisms explaining our findings. While we observe occupational sorting, we cannot exclude the possibility of homogeneous effects across socio-demographic groups, nor the existence of industry and geographic spillover effects.
期刊介绍：
World Development is a multi-disciplinary monthly journal of development studies. It seeks to explore ways of improving standards of living, and the human condition generally, by examining potential solutions to problems such as: poverty, unemployment, malnutrition, disease, lack of shelter, environmental degradation, inadequate scientific and technological resources, trade and payments imbalances, international debt, gender and ethnic discrimination, militarism and civil conflict, and lack of popular participation in economic and political life. Contributions offer constructive ideas and analysis, and highlight the lessons to be learned from the experiences of different nations, societies, and economies.
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