## Oil Shocks and Labor Market Developments

_IMF Working Papers, July 18, 2025_

## Source details

**Canonical URL:** [Oil Shocks and Labor Market Developments](https://www.imf.org/en/publications/wp/issues/2025/07/18/oil-shocks-and-labor-market-developments-568665)

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## Bibliographic details
- Authors: Diego B. P. Gomes, Lisa L Kolovich, Hannah Yi Wei
- Published: July 18, 2025
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9798229018128.001

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### Summary and main findings
- Examines how oil shocks shape labor market outcomes across 89 countries from 1975 to 2022.
- Uses a high-frequency oil supply shock series and a rich panel of quarterly labor market data.
- Shocks raising oil prices trigger sharp and persistent employment losses, particularly in:
  - oil-importing countries,
  - oil-intensive sectors,
  - among male workers.
- Delayed but enduring employment declines also emerge in:
  - oil-moderate sectors,
  - among female workers.
- Employment gains in oil-exporting countries, and following expansionary supply shocks, are comparatively modest.
- Labor force participation responds less consistently, with higher variability across contexts.
- Concludes that oil shocks transmit unevenly through labor markets, producing lasting impacts across countries, sectors, and demographic groups that extend beyond short-term macroeconomic fluctuations.

### Methodology and data
- Cross-country panel analysis covering 89 countries over the period 1975 to 2022.
- Leverages a high-frequency oil supply shock series for identification.
- Employs quarterly labor market data to trace dynamics of employment and labor force participation.

### Subject coverage and keywords
- Subject: Commodities; Economic theory; Labor; Labor force participation; Labor markets; Oil; Oil production; Production; Supply shocks.
- Keywords include: cross-country labor adjustment; employment gain; employment heterogeneity; Global; high-frequency identification; high-frequency oil supply shock series; Labor force participation; labor market; labor market development; Labor markets; Oil; Oil production; oil shock; oil supply shocks; oil-importing country; Supply shocks; trigger sharp.

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- **Working Paper**
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_Source: https://www.imf.org/en/publications/wp/issues/2025/07/18/oil-shocks-and-labor-market-developments-568665_