Thursday, August 11, 2011

Tex-Pats out there somewhere

There is a new report via Penn State and some partners on the economic impact of Marcellus Shale development.  According to the news coverage the report has some new data on the great Marcellus worker mystery.  From Somerset County's Daily American:
"The study also suggests that a large majority of industry employees are coming from out of state. While overall employment increased in about half of the municipalities, only 28 percent experienced lower unemployment rates in 2010."
This all gets to just a small debate over whether the development of shale gas in Pennsylvania is generating jobs for folks residing in the state already, or for folks coming into the state from elsewhere.  My version of that is that it makes a difference whether you are talking about folks who are flying in temporarily in stints, versus people moving into the state from elsewhere.  If folks are actually moving into the state it clearly will have positive impacts on state-wide population trends as well as economic growth.  If folks just fly in and fly out,  but continue to make their permanent residences elsewhere, it makes the Pennsylvania T akin to a large North Sea oil platform. Or to use a US analogy.. maybe places like Altoona, or even Pittsburgh are the Port Fourhon's of Midatlantic?  If folks are not living here permanently, they will be buying their homes elsewhere.  Making all of those home related purchases elsewhere and raising their families elsewhere and so forth and so on.

Clearly there are new jobs in Pennsylvania resulting from shale gas develoment.  The scale of employment projections I have seen make it impossible that all the new jobs are being filled by folks in the parts of Pennsylvania where most of the drilling has been happening.  The fundamental question is whether the folks are itinerant or permanent migrants into Pennsylvania. 

So is this migration happening?  It was brough up specifically recently by Brian O. in the PG.  Brian isn't the only one who has brought up this issue of Marcellus Shale induced migration...  for some rather colorfully named "Tex-Pats" I learn.  I thought I might try to find the migrants in the data.  Has there been some shift in migration flows that correlates with the beginning of shale gas development in Pennsylvania is the question.  Seemed the best place to start was to look specifically at migration flows between Texas and Pennsylvania. That is obviously just one particular migration flow, but since Texas is the place with the shale gas expertise, it is the place you would expect to see some of the specific shale gas talent diaspora.  Here is what I get from the IRS migration data which will capture those who are telling the IRS they have moved in or out of Pennsylvania.. probably correlates pretty clsoely to where they are paying most of their taxes overall: 


So maybe there are a few net new migrants resulting from shale gas development, but I don't think you will find much evidence of a change in trend in the data state-wide as shown there.   At least from this data the answer to whether the the shale workers are moving to Pennsylvania is no.. but it may be it is too soon to measure the full migration flow that shale development may be inspiring.  This data reflects moves that have happened in 2009 at the latest. So the better answer is at least through 2009 is 'not yet'.   

Still, look at the scale and for state-wide migration flows those are not the biggest of numbers. It will not take much new migration to really show some shift in the trend.. or any shift in trend.  Seems to me that the argument that folks are moving into Pennsylvania because of shale development has been floating out there for a couple years now at least so you would see something by now in the IRS data.  So we will keep watching.  I would be surprised if you do not see some movement in this trend in subsequent years.   Just an exogenous extra 1,000 migrants a year (roughly a total of 15 people per county in Pennsylvania...  in other words just a few housholds) from Texas to anywhere in Pennsylvania would cut that net migration time series in half from where it has been recetly.  Given the scale of employment impacts that are floating out there, seems like it would be hard to hide any meaninfulg impact on migration flows. 

For those who want more detail, this is the table that I made the graph from.  

TX to PA
PA to TX
Net
2004-20055,2046,488-1,284
2005-20065,2367,405-2,169
2006-20075,2207,452-2,232
2007-20085,3727,834-2,462
2008-20095,4887,637-2,149

5 Comments:

Anonymous Mark Denovich said...

I lived in England for a few years, on returning to Pittsburgh for good last year I was struck by the number of out of state license plates I saw. Maybe I never noticed them before (like when you buy a motorcycle you start seeing motorcyclists everywhere), but the fact that so many seemed to be from quite far away made me think something was up. When I saw the third Texas plate in a single day it made me start to think shale gas development might be the reason. Completely unscientific for sure, not even sure if it is worth the time to type this... Anyone else notice a similar phenomenon?

Friday, August 12, 2011 4:30:00 PM  
Anonymous The Wiz said...

Many people here from Arkansas, Oklahoma, and Louisiana too. I know of a couple of guys that bought homes here and go home every other weekend. Hated staying in motels.

I know one guy that wanted to buy a car here but was told he couldn't get insurance because he lived out of state. So he flew home to Ok, bought a car and drove it up. The state lost out on the sales tax and whatever tax on the insurance and income tax and business tax...the dealer and the salesman, and the insurer all lost commissions.

I'm told a lot of those trucks with foreign plates are driven by local people. Its just the vehicles are company trucks brought up to work here. Would be interesting to survey a few work crews to see what percentage are Pa residents.

Those migration stats...doesn't that mean people that moved and changed residence? What about people that work here but maintain residence in their home state?

Friday, August 12, 2011 11:01:00 PM  
Anonymous MH said...

The real estate section of Craigslist has an ad titled "Relocating to the Marcellus Shale Region?" I flagged it as spam since is had no information except a link to a very dubious looking URL, but it does show somebody has the idea that such an ad will attract money.

Saturday, August 13, 2011 5:14:00 PM  
Anonymous BrianTH said...

If the Marcellus play does last decades, it is hard for me to imagine many of the workers will remain migrant.

Sunday, August 14, 2011 11:18:00 AM  
Anonymous MN said...

All I know is what I hear from my husband, who works in the industry. Many of his co-workers are from other states, including Texas, Oklahoma, Wyoming, and Indiana. At first they lived in hotels or rentals, but many of them - most I would say - buy houses here eventually. They move their young families here. And recently one of his co-workers obtained a PA license just so he could buy a new car here. I'm sure that's not an isolated case. So they are moving here.

But that is not to say that all of the jobs are going to out-of-staters. My husband has been working in the industry for two years now, and he had helped friends and relatives obtain jobs at his company as well. My brother-in-law was recently hired at a different company. There are just too many jobs to all be filled by out-of-staters, and many of those who are from out-of-state either come just for a year or two to train the locals or they become managers here because of their experience.

And the company trucks with the out-of-state licenses are driven by local people. The companies just purchase and register them in other states.

Thursday, August 18, 2011 10:47:00 AM  

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