[Vision2020] Wal-Mart Reduces Employment?

[Ron Force]

Paul Krugman referenced this study in his column today, but had the source
wrong.  It's from the National Bureau of Economic Research. The whole paper
costs $5.

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http://www.nber.org/papers/w11782

David Neumark, Junfu Zhang, Stephen Ciccarella

NBER Working Paper No. 11782
Issued in November 2005
NBER Program(s):   LS

---- Abstract -----

We estimate the effects of Wal-Mart stores on county-level 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 variable 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. In the retail sector, on average, Wal-Mart stores
reduce employment by two to four percent. There is some evidence that
payrolls per worker also decline, by about 3.5 percent, but this conclusion
is less robust. Either way, though, retail earnings fall. Overall, there is
some evidence that Wal-Mart stores increase total employment on the order of
two percent, although not all of the evidence supports this conclusion.
There is stronger evidence that total payrolls per person decline, by about
five percent in the aggregate, implying that residents of local labor
markets earn less following the opening of Wal-Mart stores. And in the
South, where Wal-Mart stores are most prevalent and have been open the
longest, the evidence indicates that Wal-Mart reduces retail employment,
total employment, and total payrolls per person.