A Quasi-Experimental Test of Large Retail Store Impacts on Regional Labor Markets: The Case of Cabela's Retail Outlets

This study applies a quasi-experimental method for performing economic impact analy-sis of a firm‟s entrance on regional labor markets. The impact studied is the entrance of a Ca-bela‟s retail outlet in seven U.S. counties from 1998 through 2003. Using a time-space dynamic model in a monthly panel data setting, this paper evaluates the impact of new firm entrance on employment, unemployment rates and labor forces in 7 control and 7 treatment counties. I include an endogeneity test, rejecting growth and labor market endogeneity in the entrance of Cabela‟s. The findings suggest that the entrance of a large-scale specialty retail store has no persistent impact on employment in the effected or surrounding counties. These findings suggest labor market constraints. More simply retail wages are not sufficient to increase labor market participation or alter economic migration patterns in the affected counties. This paper recommends that benefit cost analysis be performed when public resources are dedicated to infrastructure or tax incentive efforts.