Losing in a boom: Long-term consequences of a local economic shock for female labour market outcomes

• Published in: Labour economics Vol. 73; p. 102080
• Main Authors: Bennett, Patrick, Ravetti, Chiara, Wong, Po Yin
• Format: Journal Article
• Language: English
• Published: Elsevier B.V 01.12.2021
• Subjects: Female labour supply; Gender; Natural resources booms; Q33; J12; Gender; Female labour supply; Natural resources booms; J1
• ISSN: 0927-5371; 1879-1034
• DOI: 10.1016/j.labeco.2021.102080

•Income trajectories of male and female workers diverge after the discovery of oil.•Male income persistently increases, while female income decreases considerably.•Intra-household equality declines, as women contribute less to household income.•Women drop out of the labour force and do not transition to highly paid occupations.•However, the next generation of female workers close these income gaps. This article examines the long-term labour market consequences of a positive and large-scale economic shock, the discovery of oil and gas in Norway. Using longitudinal data on the entire Norwegian population, we find that the shock increases male income by around 7%, while reducing female income by up to 14%. Although married women experience the largest income losses, they also have higher household income, revealing the importance of labour supply adjustments within households. While these income shifts persist for two decades, the subsequent generation of female workers are able to close the income gap with their peers in areas less affected by the oil boom.