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The Distributional Impacts of an Energy Boom in Western Canada

Author

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  • Marchand, Joseph

    (University of Alberta, Department of Economics)

Abstract
In the energy-rich provinces of Western Canada, inequality rose over the past two decades while poverty declined, begging the question of whether the recent energy boom was a contributing factor. This study uses local labor market variation in energy extraction intensity to identify these distributional impacts. The growth in local outcomes attributable to the boom is found to be U-shaped and significant across all distributional segments, leading to somewhat increased local inequality aggregates and reduced local poverty. This pattern is preserved but varies across sectors, driving a large local inequality increase in energy extraction, with smaller rises and reductions in other industries.

Suggested Citation

  • Marchand, Joseph, 2013. "The Distributional Impacts of an Energy Boom in Western Canada," Working Papers 2013-13, University of Alberta, Department of Economics, revised 01 Oct 2014.
    • Handle: RePEc:ris:albaec:2013_013
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    Cited by:

    1. W. Craig Riddell, 2022. "The labor market in Canada, 2000–2021," IZA World of Labor, Institute of Labor Economics (IZA), pages 432-432, November.
    2. Sebastian Fossati & Joseph Marchand, 2024. "First to $15: Alberta’s Minimum Wage Policy on Employment by Wages, Ages, and Places," ILR Review, Cornell University, ILR School, vol. 77(1), pages 119-142, January.
    3. David A. Green & René Morissette & Ben M. Sand & Iain Snoddy, 2019. "Economy-Wide Spillovers from Booms: Long-Distance Commuting and the Spread of Wage Effects," Journal of Labor Economics, University of Chicago Press, vol. 37(S2), pages 643-687.
    4. Kelly Foley & David A. Green & W. Craig Riddell, 2024. "Canadian inequality over the last 40 years: common and contrary variations on universal themes," Fiscal Studies, John Wiley & Sons, vol. 45(2), pages 119-130, June.
    5. Fossati, Sebastian & Marchand, Joseph, 2020. "First to $15: Alberta's Minimum Wage Policy on Employment by Wages, Ages, and Places," Working Papers 2020-15, University of Alberta, Department of Economics, revised 27 Jul 2023.
    6. Peter Burton & Shelley Phipps, 2017. "Economic Well-Being of Canadian Children," Canadian Public Policy, University of Toronto Press, vol. 43(4), pages 299-330, December.
    7. Nicole M. Fortin & Thomas Lemieux, 2015. "Changes in wage inequality in Canada: An interprovincial perspective," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 48(2), pages 682-713, May.
    8. Joseph Marchand & Jeremy Weber, 2018. "Local Labor Markets And Natural Resources: A Synthesis Of The Literature," Journal of Economic Surveys, Wiley Blackwell, vol. 32(2), pages 469-490, April.
    9. Joseph Marchand, 2017. "Thinking about Minimum Wage Increases in Alberta: Theoretically, Empirically, and Regionally," C.D. Howe Institute Commentary, C.D. Howe Institute, issue 491, pages 1-20, September.
    10. Marchand, Joseph, 2020. "Routine Tasks were Demanded from Workers during an Energy Boom," Working Papers 2020-8, University of Alberta, Department of Economics.
    11. Chan, Jeff & Karim, Ridwan, 2023. "Oil royalties and the provision of public education in Brazil," Economics of Education Review, Elsevier, vol. 92(C).
    12. Loujaina Abdelwahed & Cole Campbell, 2024. "Unequal ground: oil booms and income inequality in the USA," Economica, London School of Economics and Political Science, vol. 91(363), pages 880-910, July.
    13. Benoit Dostie, 2018. "Polarisation du marché du travail, structure industrielle et croissance économique," CIRANO Project Reports 2018rp-02, CIRANO.
    14. Christopher Hartwell & Roman Horvath & Eva Horvathova & Olga Popova, 2022. "Natural resources and income inequality in developed countries: synthetic control method evidence," Empirical Economics, Springer, vol. 62(2), pages 297-338, February.
    15. Álvarez, Roberto & García-Marín, Álvaro & Ilabaca, Sebastián, 2021. "Commodity price shocks and poverty reduction in Chile," Resources Policy, Elsevier, vol. 70(C).
    16. Miles Corak, 2016. "`Inequality is the root of social evil,' or Maybe Not? Two Stories about Inequality and Public Policy," Canadian Public Policy, University of Toronto Press, vol. 42(4), pages 367-414, December.
    17. W. Craig Riddell, 2018. "The labor market in Canada, 2000–2016," IZA World of Labor, Institute of Labor Economics (IZA), pages 432-432, April.

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    More about this item

    Keywords

    distribution; energy boom; inequality; local labor markets; poverty;
    All these keywords.

    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • Q33 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Resource Booms (Dutch Disease)
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population

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