The Alaskan labor market during the pipeline era

Built between 1974 and 1977, the Trans-Alaska Pipeline was the largest privately financed construction project in world history. The Alaskan labor market during the pipeline era provides an ideal opportunity to view labor market responses to a large, anticipated, and temporary shock to labor demand. The paper presents several theoretical models of market responses to temporary demand shocks and then assesses the ability of each model to explain the Alaskan data. Among the findings are that Alaskan wages were very flexible, labor supply was quite elastic on both the intensive (hours per worker) and extensive (number of workers) margins, and even a major short-run demand shock need not have a long-run impact.