The Effects of Wal-Mart on Local Labor Markets

David Neumark, Junfu Zhang and Stephen Ciccarella ()

No 60711, Working Papers from University of California-Irvine, Department of Economics

Abstract: 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.

Keywords: Wal-Mart; Employment (search for similar items in EconPapers)
JEL-codes: J21 R12 (search for similar items in EconPapers)
Pages: 52 pages
Date: 2006-12
New Economics Papers: this item is included in nep-geo, nep-lab and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (22)

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https://www.economics.uci.edu/files/docs/workingpapers/2006-07/Neumark-11.pdf (application/pdf)

Related works:
Journal Article: The effects of Wal-Mart on local labor markets (2008)
Working Paper: The Effects of Wal-Mart on Local Labor Markets (2007)
Working Paper: The Effects of Wal-Mart on Local Labor Markets (2005)
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Persistent link: https://EconPapers.repec.org/RePEc:irv:wpaper:060711

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