Creative Destruction? Impact of E-Commerce on the Retail Sector

Sudheer Chava, Alexander Oettl, Manpreet Singh and Linghang Zeng

No 30077, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Using an administrative payroll dataset for 2.6 million retail workers, we find that the staggered rollout of a major e-commerce firm's fulfillment centers reduces traditional retail workers' income in geographically proximate counties by 2.4%. Wages of hourly workers, especially part-time hourly workers, decrease significantly, driven by a drop in the number of hours worked. We observe a U-shaped pattern in which both young and old workers experience a sharper decrease in wage income. Consequently, some workers experience an increase in credit card delinquency. Using data for 3.2 million stores, we find that sales (employment) at proximate stores decrease by 4% (2.1%). Exits, especially of young and small stores, increase, and entry decreases. In aggregate, the retail sector loses 938 jobs per county per quarter, and the transportation-warehousing sector (food services sector) gains 256 (143) jobs. Our results highlight how creative destruction led by e-commerce impacts local labor markets.

JEL-codes: J30 L81 O33 (search for similar items in EconPapers)
Date: 2022-05
New Economics Papers: this item is included in nep-dem, nep-lma, nep-pay and nep-ure
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Citations: View citations in EconPapers (2)

Published as Sudheer Chava & Alexander Oettl & Manpreet Singh & Linghang Zeng, 2024. "Creative Destruction? Impact of E-Commerce on the Retail Sector," Management Science, vol 70(4), pages 2168-2187.

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