Monopsony Power and Poverty: The Consequences of Walmart Supercenter Openings

Lukas Lehner, Zachary Parolin (), Clemente Pignatti () and Rafael Pintro Schmitt ()
Additional contact information
Zachary Parolin: Bocconi University
Clemente Pignatti: Bocconi University
Rafael Pintro Schmitt: University of California, Berkeley

INET Oxford Working Papers from Institute for New Economic Thinking at the Oxford Martin School, University of Oxford

Abstract: Prior research suggests that Walmart Supercenters exert substantial power over the low-wage labor market, though the consequences of Supercenter openings on household incomes and public finances are less clear. This study uses restricted-access Panel Study of Income Dynamics data from 1970 to 2019 to study how Walmart Supercenter openings affect poverty, tax liabilities, and receipt of income transfers. Using a stacked difference-in-differences approach, we find that the opening of a Supercenter leads to a 2 percentage point (16%) increase in poverty. This increase is channelled through declining annual earnings and persists for 10 years following the Supercenter's entry. Increases in poverty are particularly strong for younger and less-educated adults, and for adults with pre-treatment incomes below the national median. Moreover, Walmart Supercenter openings lead to a $200 (or 16%) per household per year increase in government income transfers received, and a $920 (or 5%) per household per year decrease in tax revenues.

Keywords: poverty; monopsony power; Walmart; local labor markets; economic inequality (search for similar items in EconPapers)
JEL-codes: I32 J23 J31 J42 R23 (search for similar items in EconPapers)
Pages: 70 pages
Date: 2024-09
References: Add references at CitEc
Citations:

Downloads: (external link)
https://oms-inet.files.svdcdn.com/production/files ... ed.pdf?dm=1727880243 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:amz:wpaper:2024-07

Access Statistics for this paper

More papers in INET Oxford Working Papers from Institute for New Economic Thinking at the Oxford Martin School, University of Oxford Contact information at EDIRC.
Bibliographic data for series maintained by INET Oxford admin team ().