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

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Author Info
Emek Basker (University of Missouri)

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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-Mart's 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.

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Paper provided by EconWPA in its series Labor and Demography with number 0303002.

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Length: 46 pages
Date of creation: 13 Mar 2003
Date of revision: 11 Mar 2005
Handle: RePEc:wpa:wuwpla:0303002

Note: Type of Document - pdf; prepared on IBM PC - PC-TEX; to print on PostScript; pages: 46 ; figures: included. University of Missouri Working Paper 02-15
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Web page: http://129.3.20.41

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Related research
Keywords: Wal-Mart retail employment;

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Find related papers by JEL classification:
O33 - Economic Development, Technological Change, and Growth - - Technological Change - - - Technological Change: Choices and Consequences; Diffusion Processes
J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
L81 - Industrial Organization - - Industry Studies: Services - - - Retail and Wholesale Trade; e-Commerce

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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Full references

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Rosario Rivero & Rodrigo Vergara, 2006. "Do Large Retailers Affect Employment? Evidence from an Emerging Economy," Documentos de Trabajo 307, Instituto de Economía. Pontificia Universidad Católica de Chile.. [Downloadable!]
    Other versions:
  2. Emek Basker & Shawn Klimek & Pham Hoang Van, 2008. "Supersize It: The Growth of Retail Chains and the Rise of the "Big Box" Retail Format," Working Papers 0809, Department of Economics, University of Missouri. [Downloadable!]
    Other versions:
  3. Chad R. Wilkerson & Megan D. Williams, 2007. "The Tenth District's defining industries: how are they changing?," Economic Review, Federal Reserve Bank of Kansas City, issue Q III, pages 59-81. [Downloadable!]
  4. Bonanno, Alessandro & Lopez, Rigoberto A., 2008. "Wal-Mart’s Monopsony Power in Local Labor Markets," 2008 Annual Meeting, July 27-29, 2008, Orlando, Florida 6219, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association). [Downloadable!]
  5. Davis, Elizabeth & Freedman, Matthew & Lane, Julia & McCall, Brian & Nestoriak, Nicole & Park, Timothy, 2005. "Product Market Competition and Human Resource Practices: An Analysis of the Retail Food Sector," Working Papers 14349, University of Minnesota, The Food Industry Center. [Downloadable!]
    Other versions:
  6. Goetz, Stephan J. & Swaminathan, Hema, 2004. "Wal-Mart and Rural Poverty," 2004 Annual meeting, August 1-4, Denver, CO 20149, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association). [Downloadable!]
  7. Loreto Lira & Rosario Rivero & Rodrigo Vergara, 2005. "Entry and Prices: Evidence from the Chilean Supermarket Industry," Documentos de Trabajo 299, Instituto de Economía. Pontificia Universidad Católica de Chile.. [Downloadable!]
  8. Hicks, Michael, 2006. "Transportation and Infrastructure, Retail Clustering, and Local Public Finance: Evidence from Wal-Mart's Expansion," MPRA Paper 52, University Library of Munich, Germany. [Downloadable!]
    Other versions:
  9. Martens, Bobby J. & Florax, Raymond J.G.M. & Dooley, Frank, 2005. "The Effect of Entry by Supercenter and Warehouse Club Retailers on Grocery Sales and Small Supermarkets: A Spatial Analysis," 2005 Annual meeting, July 24-27, Providence, RI 19176, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association). [Downloadable!]
  10. Michael J. Hicks, 2005. "Does Wal-Mart Cause an Increase in Anti-Poverty Program Expenditures?," Public Economics 0511015, EconWPA. [Downloadable!]
  11. Michael Hicks, 2007. "Wal-Mart’s Impact on Local Revenue and Expenditure Instruments in Ohio, 1988–2003," Atlantic Economic Journal, International Atlantic Economic Society, vol. 35(1), pages 77-95, March. [Downloadable!] (restricted)
  12. Michael J. Hicks, 2005. "What Do Quarterly Workforce Dynamics Tell Us About Wal-Mart? Evidence from New Stores in Pennsylvania," Urban/Regional 0511010, EconWPA. [Downloadable!]
  13. Steven J. Davis & Luis Rivera-Batiz, 2005. "The Climate for Business Development and Employment Growth in Puerto Rico," NBER Working Papers 11679, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  14. Art Carden & Charles Courtemanche & Jeremy Meiners, 2009. "Does Wal-Mart reduce social capital?," Public Choice, Springer, vol. 138(1), pages 109-136, January. [Downloadable!] (restricted)
  15. Emek Basker, 2007. "When Good Instruments Go Bad," Working Papers 0706, Department of Economics, University of Missouri. [Downloadable!]
  16. David Neumark & Junfu Zhang & Stephen Ciccarella, 2006. "The Effects of Wal-Mart on Local Labor Markets," Working Papers 060711, University of California-Irvine, Department of Economics. [Downloadable!]
    Other versions:
  17. Emek Basker, 2004. "Selling a Cheaper Mousetrap: Wal-Marts Effect on Retail Prices," Working Papers 0401, Department of Economics, University of Missouri, revised 16 Mar 2004. [Downloadable!]
    Other versions:
  18. Ronald Jarmin & Shawn Klimek & Javier Miranda, 2005. "The Role of Retail Chains: National, Regional, and Industry Results," Working Papers 05-30, Center for Economic Studies, U.S. Census Bureau. [Downloadable!]
  19. Michael J. Hicks, 2005. "The Impact of Wal-Mart on Local Fiscal Health: Evidence from a Panel of Ohio Counties," Public Economics 0511016, EconWPA. [Downloadable!]
  20. Emek Basker & Pham Hoang Van, 2005. "Putting a Smiley Face on the Dragon: Wal-Mart as Catalyst to U.S.-China Trade," Working Papers 0506, Department of Economics, University of Missouri, revised 07 Oct 2005. [Downloadable!]
  21. Lesley Chiou, 2005. "Empirical Analysis of Retail Competition: Spatial Differentiation at Wal-Mart, Amazon.com, and Their Competitors," Occidental Economics Working Papers 3, Occidental College, Department of Economics, revised Nov 2006. [Downloadable!]
  22. Raffaella Sadun, 2008. "Does Planning Regulation Protect Independent Retailers?," CEP Discussion Papers dp0888, Centre for Economic Performance, LSE. [Downloadable!]
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