Oil price dynamics and sectoral employment in the U.S.

Abstract This paper examines the long- and short-run relationships between oil prices and employment in four sectors of the top oil producing counties in the U.S. In the long-run, findings from a Panel Auto Regressive Distributed Lag (ARDL) model illustrate causality running from oil prices to employment in every sector in the county panel. Findings from the state panel indicate the presence of long- and short-run causality from oil prices to mining and trade employment, while service employment is not affected. Natural resource and mining employment reverts fastest to equilibrium following shocks in oil prices.