Causal Effects of Economic Conditions on Family Formation: Evidence from the Fracking Boom

There has been a well-documented “retreat from marriage” among less educated individuals in the U.S. and non-marital childbearing has become the norm among young mothers and mothers with low levels of education. Many social scientists and policymakers have hypothesized that weak economic prospects for men in these populations are at least partially responsible for this shift in marriage and family formation. As an empirical matter, it is difficult to isolate the causal effect of economic opportunity on marriage and family formation, since work and family outcomes affect one another as well as jointly respond to other social and cultural forces.

In this project, Dr. Melissa Kearney proposes to empirically exploit the rapid and localized expansion of oil and gas production due to hydraulic fracturing (fracking) that has taken place in select counties throughout the U.S., leading to increased economic opportunity and elevated wages for less-educated men in these geographic areas. Dr. Kearney will use this exogenous shock to employment and wages as the basis for an instrumental variables strategy designed to estimate the causal relationship between improved economic prospects for low-skilled men and family formation outcomes. Establishing this causal parameter would constitute an important contribution to the literature on the economics of the family.