Market Concentration and Natural Resource Development in Rural America

Natural resource development, both extractive (oil, gas, mining, and timber) and non‐extractive (tourism, real estate, outdoor recreation), has been found to negatively impact economic prosperity in rural America. One mechanism recently proposed for why this occurs is high levels of labor market con...

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Bibliographic Details
Published inRural sociology Vol. 87; no. 1; pp. 68 - 93
Main Authors Mueller, J. Tom, Shircliff, Jesse E., Steinbaum, Marshall
Format Journal Article
LanguageEnglish
Published Columbia Blackwell Publishing Ltd 01.03.2022
Subjects
Economic development
Economics
Employers
Imbalance
Impact analysis
Labor
Labor market
Manufacturing
Market concentration
Mining
Natural resources
Outdoor activities
Outdoor recreation
Poverty
Prosperity
Real estate
Recreation
Resource development
Rural areas
Rural development
Rural poverty
Specialization
Tourism
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Summary:Natural resource development, both extractive (oil, gas, mining, and timber) and non‐extractive (tourism, real estate, outdoor recreation), has been found to negatively impact economic prosperity in rural America. One mechanism recently proposed for why this occurs is high levels of labor market concentration, or oligopsony. Oligopsony occurs when there are few employers within a labor market and can lead to suppressed wages and a power imbalance between employers and workers. In this paper, we test the moderating effect of labor market concentration on the relationship between natural resource development and per capita income and poverty in rural America from 2010 to 2016. By comparing results between extractive and non‐extractive development, as well as manufacturing, we show that labor market concentration attenuates the beneficial relationship observed at low levels of specialization in natural resources—particularly for extractive forms of development. Further, by finding no significant relationship between manufacturing specialization and economic prosperity, nor any moderating effect of labor market concentration in the case of manufacturing, we demonstrate that natural resource development and labor market concentration have a unique relationship with rural American economic prosperity.
Bibliography:tom.mueller@ou.edu
Address correspondence to J. Tom Mueller, Department of Geography and Environmental Sustainability University of Oklahoma Norman, Oklahoma Email
ISSN:0036-0112
1549-0831
DOI:10.1111/ruso.12417