How do oil prices influence Alaska and other energy-dependent states?
Prepared with support from Northrim Bank
We analyze monthly data from the Bureau of Labor and Statistics to evaluate howfluctuations in oil prices affect economic activity in Alaska and other energy-dependent states. For this most recent recession, we find that only 6 of the traditional oil states experienced a recession. Four of those have already recovered, leaving Alaska and North Dakota as the only two to continue losing jobs. Using monthly employment data between 1991 and 2018 we estimate that, on average, the long run effect of a 10% change in oil prices results in a 1.7% change in employment across the five most important oil states. When analyzed individually, we find that some of them experience symmetric responses to oil price increases and decreases while others are much more sensitive to price declines.