•   •   •   •

An earlier version of the paper was presented at the American Sociological Association annual conference in July 2005.

Download the Paper (596 K, PDF file) - August 6, 2007 Tell a colleague about it. Printing Tips: Select 'print as image' in the Acrobat print dialog if you have trouble printing.

ABSTRACT:
This paper estimates the effect of Wal-Mart expansion on wages, benefits, and skill-composition of retail workers during the 1990s. We exploit the spatial pattern of Wal-Mart diffusion, radiating outward from the original store in Benton county, Arkansas, to control for potential endogeneity in store openings using both instrumental variable and control function approaches. Estimates from state and county level data suggest that store openings reduced both the average earnings and health benefits of retail workers. At the county level, a new Wal-Mart is found to reduce retail earnings, on average, by .5 to .9 percent. Moreover, we find that changes in skill-composition explain only a small part of compensation reduction, indicating that the decline in retail wages reflect a reduction in labor market rents.

SUGGESTED CITATION:
Arindrajit Dube, T. William Lester, and Barry Eidlin, "Firm Entry and Wages: Impact of Wal-Mart Growth on Earnings Throughout the Retail Sector" (August 6, 2007). Institute for Research on Labor and Employment. Institute for Research on Labor and Employment Working Paper Series. Paper iirwps-126-05.
http://repositories.cdlib.org/iir/iirwps/iirwps-126-05