Wednesday, September 10, 2014

Dutch disease in local Canadian communities?

Recently (to be) published, a research on the impact of different types of natural resource industry (pure extraction vs. 'transformation' or processing) on 135 urban areas in Canada over 1971-2006. 

"Looking at 135 Canadian urban areas over a 35-year period (1971–2006), the paper examines the relationship between initial specialisation (using employment) in resource industries and various growth indicators via a mix of descriptive statistics and econometric modelling. The paper differentiates between two resources sectors: resource extraction (mining, logging, etc.); primary resource transformation (paper mills, foundries, smelters, etc.). The evidence for a “resource curse” is mixed. Resource transformation industries are found to be associated with slower population growth, also depressing growth in college-educated cohorts. However, no such relationship is found for resource extraction. We find no evidence for a durable Dutch Disease wage effect. Wages fluctuate in response to resource demand as do working-age populations. Many relationships hold only for the short run. In the end, we argue, the impact of resource specialisation depends on the particular resource and type of industry it spawns, as well as location. There is no generalisable resource curse, valid for all resources and all places."

Relates to a wider research on the local impact of natural resource industry, e.g. OxCarre's James and Aadland (2011, Maine and Wyoming counties), and Allcott and Kenistorn (WP 2014, US Counties) among others. The last sentence suggests that there is more scope in research on the conditions and determinants at play with respect to natural resource industry at the local level.

No comments:

Post a Comment

Reactions welcome! Please use your full name.