We explore the educational response to fracking, taking advantage of the timing of its widespread introduction and the spatial variation in shale oil and gas reserves. We show that local labor demand shocks from fracking have been biased toward low-skilled labor and males, reducing the return to high school completion among men. We also show that fracking has increased high school dropout rates of male teens, both overall and relative to females
The increase in education has produced disappointingly small increases in household consumption. The reason appears to be that very few men and hardly any women are in salary employment where the value of extra education is high....most Indians still work in various forms of self-employment or home production where the value of extra education is less obvious. Looking only at those who work for wages, better educated groups of males earn substantially more than less educated groups. Most of the returns to education seem to be coming from those who have a regular salary, not from those in the casual labour market.
So a large part of the reason that the overall return to education is so low for men is that the one area where there are high returns to education — salary employment — absorbs only 20% of working-age men. Similarly, because so few women are employed for a regular salary, we see even lower returns to education for women. Put a different way, the reason education does not have high returns is because so few Indians work in areas where education is likely to be valuable.