The Impact of Wal-Mart on Employment Andwage Differentials in Alabama

Using Alabama county data from 1980 and 1990 censuses and store opening dates, this paper presents an econometric study of the impact of the presence of Wal-Mart's on black-white income and unemployment differentials. It is posited that Wal-Mart changes the competitive nature of the labor market in a way that is beneficial to blacks. After establishing baseline relationships between unemployment and income with respect to demographic and economic variables, the impact of a Wal-Mart is tested by using a dummy variable and a cumulative years variable. Wal-Mart is found to have significantly lowered the relative unemployment rates of blacks in those counties where it is present, but to have had no significant impact on relative incomes after the influences of other social-economic variables are taken into account.