Has Norway’s oil riches hampered education? : oil activity and its relative effects on the educational attainment of affiliated municipalities

Abstract

This thesis aims to uncover if communities affected by oil activity have suffered a reduction in their share of higher educational attainment, compared to other municipalities. Using data on oil production and investments for the oil field’s main supply bases, together with educational data on a municipal level, we examine this relationship during the period 1980 – 2016. This is estimated through a fixed effects model, where we look at the direct, per-unit effect oil activity has on the share of educational attainment. Secondly, we employ a difference-in-difference (DID) estimation using a roll-out method, where we look at the permanent effects surrounding the first introduction of oil activity. To examine the difference-in-difference assumptions, an event study specification is utilized, at the same time allowing us to observe the yearly effects surrounding the introduction of oil activity. Our findings indicate that the relationship between oil production and the share of higher education for an oil-related municipality is negative between the years of 1998 and 2016 – the most recent half of our inspected time period. Our results suggest that a 10% increase in oil production corresponds to a long-term reduction in higher educational attainment of up to 0.038 percentage points. Most of the power behind these results stem from the effects oil production have on the educational attainment of women. Our estimates show that women experience effects between 159% – 486% larger than their male counterparts. We also find that of the two higher educational levels, undergraduate attainment is the most sensitive to a change in oil production, being subject to reductions twice as large as the attainment of postgraduate degrees. These results have been proven robust to changes in how we define the treatment and control groups.