The Long Term Consequences of Resource‐Based Specialisation

Using geological variation in oil abundance in the Southern US, I examine the long term effects of resource‐based specialisation through economic channels. In 1890 oil abundant counties were similar to other nearby counties but after oil was discovered they began to specialise in its production. From 1940–90 oil abundance increased local employment per square kilometre especially in mining but also in manufacturing. Oil abundant counties had higher population growth, higher per capita income and better infrastructure.