Template-Type: ReDIF-Paper 1.0
Title: Monopsony Power and Poverty: The Consequences of Walmart Supercenter Openings
Abstract: Prior research suggests that Walmart Supercenters exert substantial power over the low-wage labor market, though the consequences of Supercenter openings on household incomes and public finances are less clear. This study uses restricted-access Panel Study of Income Dynamics data from 1970 to 2019 to study how Walmart Supercenter openings affect poverty, tax liabilities, and receipt of income transfers. Using a stacked difference-in-differences approach, we find that the opening of a Supercenter leads to a 2 percentage point (16%) increase in poverty. This increase is channelled through declining annual earnings and persists for 10 years following the Supercenter's entry. Increases in poverty are particularly strong for younger and less-educated adults, and for adults with pre-treatment incomes below the national median. Moreover, Walmart Supercenter openings lead to a $200 (or 16%) per household per year increase in government income transfers received, and a $920 (or 5%) per household per year decrease in tax revenues.
Author-Name: Lehner, Lukas
Author-Name: Parolin, Zachary
Author-Email: zachparolin@gmail.com
Author-Workplace-Name: Bocconi University
Author-Name: Pignatti, Clemente
Author-Email: pignatti.clemente@gmail.com
Author-Workplace-Name: Bocconi University
Author-Name:  Pintro Schmitt, Rafael
Author-Email: rafaelpintroschmitt@berkeley.edu
Author-Workplace-Name: University of California, Berkeley
File-URL: https://oms-inet.files.svdcdn.com/production/files/Monopsony_Power_and_Poverty_Sept_2024_WP-compressed.pdf?dm=1727880243
File-Format: Application/pdf
File-Function: 
Keywords: poverty, monopsony power, Walmart, local labor markets, economic inequality
Length: 70 pages
Classification-Jel: I32, J23, J31, J42, R23
Creation-Date: 2024-09
Handle: RePEc:amz:wpaper:2024-07