The effects of Wal-Mart on local labor markets

Arbeitspapier

We estimate the effects of Wal-Mart stores on county-level retail employment and earnings, accounting for endogeneity of the location and timing of Wal-Mart openings that most likely biases the evidence against finding adverse effects of Wal-Mart stores. We address the endogeneity problem using a natural instrumental variables approach that arises from the geographic and time pattern of the opening of Wal-Mart stores, which slowly spread out from the first stores in Arkansas. The employment results indicate that a Wal-Mart store opening reduces county-level retail employment by about 150 workers, implying that each Wal-Mart worker replaces approximately 1.4 retail workers. This represents a 2.7 percent reduction in average retail employment. The payroll results indicate that Wal-Mart store openings lead to declines in county-level retail earnings of about $1.2 million, or 1.3 percent. Of course, these effects occurred against a backdrop of rising retail employment, and only imply lower retail employment growth than would have occurred absent the effects of Wal-Mart.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: IZA Discussion Papers ; No. 2545

Classification and Topics

• Classification: Wirtschaft
• Subject: Einzelhandel ; Beschäftigung ; Regionaler Arbeitsmarkt ; Filiale ; USA

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Neumark, David ; Zhang, Junfu ; Ciccarella, Stephen
• Event: Veröffentlichung
• (who): Institute for the Study of Labor (IZA)
• (where): Bonn
• (when): 2007

Further information

• Handle: http://hdl.handle.net/10419/33811
• URN: urn:nbn:de:101:1-20080425510
• Last update: 10.03.2025, 11:46 AM CET