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Diffusion of E-Commerce and Retail Job Apocalypse: Evidence from Credit Card Data on Online Spending

Author

Listed:
  • Chun, Hyunbae
  • Joo, Hailey Hayeon
  • Kang, Jisoo
  • Lee, Yoonsoo

Abstract

The rapid growth of e-commerce is widely blamed for job losses in brick-and-mortar retailers. We construct a unique measure of online spending share based on 30 billion transactions of credit cards in Korea. Using the geographic variation in online spending shares, we examine the causal effect of e-commerce on retail employment at the county level. We find that the rise in online spending share from 2010 to 2015 decreases the county-level offine retail employment by about 172 workers, which represents approximately 3% reduction in average retail employment. We also find that the employment shifts from offine retail to other local businesses, such as restaurants and personal services. However, such effects of employment shift are confined in metropolitan areas and fall far short of offsetting employment losses in non-metropolitan areas. Our finding implies a prospect of Retail Job Apocalypse in certain local labor markets (i.e., non-metropolitan areas), if not everywhere.

Suggested Citation

  • Chun, Hyunbae & Joo, Hailey Hayeon & Kang, Jisoo & Lee, Yoonsoo, 2020. "Diffusion of E-Commerce and Retail Job Apocalypse: Evidence from Credit Card Data on Online Spending," CEI Working Paper Series 2020-7, Center for Economic Institutions, Institute of Economic Research, Hitotsubashi University.
    • Handle: RePEc:hit:hitcei:2020-7
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    File URL: https://hermes-ir.lib.hit-u.ac.jp/hermes/ir/re/70073/wp2020-7.pdf
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    References listed on IDEAS

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    More about this item

    Keywords

    E-Commerce; Employment; Local Labor Market; Retail; Credit Card;
    All these keywords.

    JEL classification:

    • 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
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)

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