Winning the oil lottery: the impact of natural resource extraction on growth
Published version
Peer-reviewed
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Type
Article
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Abstract
This paper provides evidence of the causal impact of oil discoveries on local development. Novel data covering the universe of oil wells drilled in Brazil allow us to exploit a quasi-experiment: Municipalities where oil was discovered consti- tute the treatment group, while municipalities with drilling but no discovery are the control group. The results show that oil discoveries significantly increase local production and have positive spillovers. Workers relocate from informal, low pro- ductivity agriculture to higher value-added activities in formal services, increasing urbanization. The results are consistent with greater local demand for non-tradable services driven by highly paid oil workers.
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Keywords
38 Economics, 3801 Applied Economics, 8 Decent Work and Economic Growth
Journal Title
Journal of Economic Growth
Conference Name
Journal ISSN
1381-4338
1573-7020
1573-7020
Volume Title
24
Publisher
Springer Science and Business Media LLC
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Sponsorship
Economic and Social Research Council (ES/R009295/1)