Study Examines Educational Attainment in States with Gas Development

A recent article published in the Energy Economics journal examined the impact shale gas development has had on educational attainment at the high school and college levels in Montana, North Dakota, and West Virginia. The study revealed decreased levels of both high school graduation/GED attainment and college attendance in all three states when compared to states without unconventional natural gas extraction.

The 3 to 6 percent decreases in educational attainment levels at both the high school and college levels in Montana, North Dakota, and West Virginia observed in the study could have major economic impacts. Researchers contend that with fewer individuals finishing high school and/or going to college, states could experience “permanently lower human capital levels with reduced long-run individual earning potential and weaker economic growth.”  An educated workforce is better equipped to adapt to advancements and changes in the labor market; decreased educational attainment creates a less educated workforce and could leave states at a disadvantage as labor markets evolve.

Educational attainment data from the targeted states was collected through the American Community Survey (ACS), an instrument of the U.S. Census Bureau.  Unlike similar previous studies, this study focused exclusively on the native-born population of the targeted states to mitigate the impact of non-native populations moving in during the boom. Additionally, the survey’s definitions of educational attainment included individuals who may have dropped out of high school but gone on to later obtain a GED.  Data used was collected between 2006-2013, 2006 being the year identified as marking a dramatic shift toward unconventional (horizontal and directional) wells.

Researchers created a control group in their study against which to compare the targeted states’ attainment data. The biggest potential flaw in the study’s data collection methods comes from timing – the newest data used in the survey is more than five years old.  In an industry as rapidly developing as shale gas, this leaves the question as to how different a similar study’s data would look in the present.

This study’s findings raise questions for Pennsylvania as it continues to undergo its own shale development. When young populations leave educational settings to pursue careers in the shale industry, this can create educational gaps that may deny these individuals more earning potential and career opportunities later in life. This in turn can have negative impacts on the overall economic growth of communities.