Losing in a boom: Long-term consequences of a local economic shock for female labour market outcomes

Abstract

This article examines the long-term labour market consequences of a positive and large-scale economic shock, the discovery of oil and gas in Norway. Using longitudinal data on the entire Norwegian population, we find that the shock increases male income by around 7%, while reducing female income by up to 14%. Although married women experience the largest income losses, they also have higher household income, revealing the importance of labour supply adjustments within households. While these income shifts persist for two decades, the subsequent generation of female workers are able to close the income gap with their peers in areas less affected by the oil boom.