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The Rise of E-Commerce and the Local Wage Structure: Evidence from the Korean Retail Industry

Author

Listed:
  • Donghan Shin

    (Korea Institute for Industrial Economics & Trade)

  • Hyunbae Chun

    (Sogang University)

Abstract

The widespread adoption of e-commerce by households has had a significant impact on local brick-and-mortar retailers, changing the wage structure of local service workers. In this study, we examine the effect of e-commerce penetration (EP) among households on the local wage structure during the period 2011–2016. Using the novel measure of county-level EP based on consumers’ credit card transactions for online shopping, we find that counties with rapid EP exhibit a broader difference in the local wage growth of skilled and unskilled workers. An increased skill wage gap can be mainly attributed to the wage gains of highskilled workers, whereas the wages of most unskilled workers show little change. These findings suggest that the skill premium associated with e-commerce diffusion may be concentrated in urban regions where high-skilled workers are in abundance.

Suggested Citation

  • Donghan Shin & Hyunbae Chun, 2023. "The Rise of E-Commerce and the Local Wage Structure: Evidence from the Korean Retail Industry," Korean Economic Review, Korean Economic Association, vol. 39, pages 315-345.
    • Handle: RePEc:kea:keappr:ker-20230701-39-2-01
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    E-Commerce; Wage; Skill; Local Labor Market; Credit Card;
    All these keywords.

    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • L86 - Industrial Organization - - Industry Studies: Services - - - Information and Internet Services; Computer Software
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population

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