Are Resource Booms a Blessing or a Curse? Evidence from People (not Places)

We provide the first estimates of the long-run income effects of temporary resource booms on people, rather than places, focusing on the U.S. oil boom and bust of the 1980s. Using household-level longitudinal data, we find positive effects during the boom period and negative effects during the bust period. The cumulative effect through 2012 was arguably negative when restricting the sample to prime working years (<55) and unambiguously positive otherwise because the boom delayed retirement. The evidence suggests the boom was ultimately a curse for the average household. It failed to generate net income gains during prime age and its volatility caused costly income-smoothing later in life.