We investigate local economic impacts of shale gas development using the natural experiment of the discontinuity in regulation caused by New York's 2008 moratorium on fracking. Using county- and zip-code-level data for 2001–2013 to examine differences in New York and Pennsylvania counties before and after the moratorium, we find that shale gas development has a positive local impact on employment and wages in the natural resource, mining, and construction sectors and an offsetting reduction in employment in the manufacturing sector. Overall, we find no statistically significant local effects on total employment or on wages.

There is much debate about the employment effect of shale gas development, especially as it relates to extraction counties. Anecdotal evidence suggests that many of the jobs created are filled by nonresidents. We examine the impact shale gas development has on local employment in Pennsylvania using a data set that links workers to their personal residences. We find that activity in the Marcellus shale has had a modest positive impact on job growth. The impact is cut in half, however, when we use data for county residents only. Thus, traditional employment data may overestimate employment impacts from shale development.