Is There a Resource Curse in the US and Canada? Evidence from the Shale Revolution

Steven Yamarik (), Florian Horky () and Jarko Fidrmuc ()
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Steven Yamarik: California State University Long Beach
Florian Horky: National Bank of Slovakia
Jarko Fidrmuc: Zeppelin University

No WP 8/2026, Working and Discussion Papers from Research Department, National Bank of Slovakia

Abstract: This paper uses the shale revolution as a natural experiment to test the resource curse in American states and Canadian provinces. We use a comprehensive set of unproved reserves of unconventional gas and oil plays for North America in 2010 to identify the impact of resource dependence on state-level economic growth. We estimate a growth regression with mining production (resource dependence), corruption and other long-run determinants. Using least squares, we find no significant link between resource dependence and state-level economic growth. However, by instrumenting resource dependence, we find evidence of a resource curse in that greater mining production (and employment) leads to lower state-level growth. Our resource curse finding is robust to fracking bans and moratoriums, alternative GDP measures and resource abundance (proved reserves). In tests for indirect transmission mechanisms, we find that greater mining activity reduces educational attainment, non-resource tax revenue, and trade openness in North America and increases the price of nontradeables relative to tradeables in the US.

JEL-codes: C21 O13 O51 Q33 R11 (search for similar items in EconPapers)
Pages: 35 pages
Date: 2026-07
New Economics Papers: this item is included in nep-his
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Persistent link: https://EconPapers.repec.org/RePEc:svk:wpaper:1144

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