The Effects of Wal-Mart on Local Labor Markets

By David Neumark, Junfu Zhang, Stephen M. Ciccarella. Social Science Research Network, 2006

298 citations recorded by the source corpus.

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 $1.4 million, or 1.5 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.

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Citations in the corpus

Estimating Network Economies in Retail Chains: A Revealed Preference Approach (2010, methodology): “Building on the profit inequalities approach developed by Pakes et al. (201 1) and Bajari, Benkard, and Levin (2007), we propose a scalable empirical framework for analyzing network entry problems that does not require solving for an equilibrium, or even that the equilibrium be unique or played in p”
Urban Economics and Entrepreneurship (2009, unknown): “14 The result that Wal-Mart has negative impacts on the local economy (Neumark et al., 2008) can be seen as complementary to the small firm effect.”
The Causes and Consequences of Wal-Mart's Growth (2007, methodology): “Following a recent public relations campaign, Wal-Mart selectively released data on store openings it had previously been reluctant to share; Neumark, Zhang, and Ciccarella (2005) were the first to use these data, which have since also been used by Basker (2006).”
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