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Upward Income Mobility & Shale Production: A Causal Connection? [Part 3]

Contributor: Cody Davis
Posted: 08/19/2013
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The Role of Shale Production

University of Michigan economics professor Dr. Mark J. Perry was quick to point out a potentially significant factor: "proximity to shale oil fields like the Bakken Formation in North Dakota."

According to Dr. Perry, "We can now add the highest level of upward income mobility in the country to the long list of significant economic benefits that the shale oil boom is bringing to North Dakota, especially to the western part of the state where the Bakken Formation is bringing wealth, prosperity, jobs and upward income mobility to America’s ‘economic miracle state.’"

The results of the study, in conjunction with the production of oil and natural gas in the United States, could help legitimize the professor’s claims.

According to the team’s findings, roughly 33 percent of children from Williston, North Dakota whose parents were in the bottom income quintile became top earners by the age of 30.

In fact, children raised in Williston had the highest probability of rising to the top income quintile than children from any other geographic region in the United States.

Furthermore, the surrounding Williams County has experienced some the lowest county unemployment rates in the U.S. in recent years due to the booming shale oil and gas production in the region.

The region with the second highest level of upward income mobility in the country was also in North Dakota. The chances a child raised in the bottom income quintile rising to the top income quintile in Dickinson were an impressive 31.4 percent.

Other territories in the Bakken such as the Lemmon, Ekalaka and Bowman areas were also determined to be regions where children raised in the lowest income quintile had about a 30 percent chance of reaching the top income quintile.

Moreover, between 2002 to 2012, the average annual wage for workers in North Dakota rose by roughly 73 percent, from $26,550 to $45,909.

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Contributor: Cody Davis