Creative Destruction? Impact of E-Commerce on the Retail Sector
Using an administrative payroll dataset for 2.6 million retail workers, we find that the staggered rollout of a major e-commerce firm's fulfillment centers reduces traditional retail workers' income in geographically proximate counties by 2.4%. Wages of hourly workers, especially part-time hourly workers, decrease significantly, driven by a drop in the number of hours worked. We observe a U-shaped pattern in which both young and old workers experience a sharper decrease in wage income. Consequently, some workers experience an increase in credit card delinquency. Using data for 3.2 million stores, we find that sales (employment) at proximate stores decrease by 4% (2.1%). Exits, especially of young and small stores, increase, and entry decreases. In aggregate, the retail sector loses 938 jobs per county per quarter, and the transportation-warehousing sector (food services sector) gains 256 (143) jobs. Our results highlight how creative destruction led by e-commerce impacts local labor markets.
-
-
Copy CitationSudheer Chava, Alexander Oettl, Manpreet Singh, and Linghang Zeng, "Creative Destruction? Impact of E-Commerce on the Retail Sector," NBER Working Paper 30077 (2022), https://doi.org/10.3386/w30077.Download Citation
-
Non-Technical Summaries
- E-commerce has dramatically altered retail in the last two decades, with online sales growing from 0.63 percent of total retail sales...
Published Versions
Sudheer Chava & Alexander Oettl & Manpreet Singh & Linghang Zeng, 2024. "Creative Destruction? Impact of E-Commerce on the Retail Sector," Management Science, vol 70(4), pages 2168-2187. citation courtesy of 
More from the NBER
In addition to working papers, the NBER disseminates affiliates’ latest findings through a range of free periodicals—the NBER Reporter, the NBER Digest, the Bulletin on Health, the Bulletin on the Economics of Alzheimer's, and the Bulletin on Entrepreneurship—as well as research spotlights, lectures, and panel videos.
