Job Creation or Destruction? Labor-Market Effects of Wal-Mart Expansion

Emek Basker

No 215, Working Papers from Department of Economics, University of Missouri

Abstract: This paper estimates the effect of Wal-Mart expansion on retail employment at the county level. Using an instrumental-variables approach to correct for both measurement error in entry dates and endogeneity of the timing of entry, I find that Wal-Mart entry increases retail employment by 100 jobs in the year of entry. Half of this gain disappears over the next five years as other retail establishments exit and contract, leaving a long-run statistically significant net gain of 50 jobs. Wholesale employment declines by approximately 20 jobs due to Wal-Marts vertical integration. No spillover effect is detected in retail sectors in which Wal-Mart does not compete directly, suggesting Wal-Mart does not create agglomeration economies in retail trade at the county level.

Keywords: Wal-Mart (search for similar items in EconPapers)
JEL-codes: J21 L11 L81 (search for similar items in EconPapers)
Pages: 34 pgs.
Date: 2002-06, Revised 2004-01
New Economics Papers: this item is included in nep-bec, nep-lab and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

Published in Review of Economics and Statistics, vol. 87, no. 1 (2005), pp. 174-183

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Journal Article: Job Creation or Destruction? Labor Market Effects of Wal-Mart Expansion (2005)
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Persistent link: https://EconPapers.repec.org/RePEc:umc:wpaper:0215

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