Author
Listed:
- Lukas Delgado-Prieto
- Andrea Otero-Cortés
- Andrés Calderón
Abstract
Hard discount stores (HDS) have changed the dynamics of the traditional retail sector by selling a basket of products at very low prices. This business model has gained significant market share in many countries, but little is known about its impact on the labor market. To fill this gap in the literature, in this paper we study the impact of the entry of hard discounters on local labor markets in Colombia. Making use of the staggered geographic expansion of major discount chains throughout the country as part of our empirical strategy and using information from different sources, such as administrative records on social security and household survey data, we analyze the impact of these stores on labor formality and tax collection. Our results show that the arrival of HDS in a municipality increases local formal employment, especially in retail, manufacturing and agriculture. This suggests that there are significant spillover effects from retail to other industries, as most of the goods sold by these stores are locally produced. As for the informal sector, increased competition between formal and informal businesses has no statistical effect on informal employment. However, there seems to be a decline in labor income of informal retailers, suggesting that the margin of adjustment is not through lower employment but via lower earnings. **** RESUMEN: Las tiendas de descuento duro (HDS por sus siglas en inglés) han cambiado las dinámicas del sector minorista tradicional al vender una canasta de productos a muy bajo precio. Este modelo de negocio ha ganado una importante cuota del mercado en muchos países, pero poco se conoce sobre su impacto en el mercado laboral. Para llenar este vacío en la literatura, en este trabajo estudiamos el impacto de la entrada de las tiendas de descuento duro en los mercados laborales locales de Colombia. Haciendo uso de la expansión geográfica escalonada de las principales cadenas de descuento por todo el país como parte de nuestra estrategia empírica y usando información de distintas fuentes, como registros administrativos sobre seguridad social y la encuesta de hogares, analizamos el impacto de estas tiendas sobre la formalidad laboral y recaudo de impuestos. Nuestros resultados muestran que la llegada de las HDS a un municipio aumenta el empleo formal local, sobre todo en los sectores del comercio minorista, la industria manufacturera y la agricultura. Esto sugiere que existen importantes efectos de derrame del comercio minorista a otros sectores económicos, ya que la mayoría de los bienes que venden estas tiendas son productos locales. En cuanto al sector informal, el aumento de la competencia entre comerciantes formales e informales no tiene efectos estadísticos sobre el empleo informal. No obstante, parece haber una disminución en los ingresos laborales de los minoristas informales, lo que sugeriría que el margen de ajuste no se da a través de menor empleo sino vía menores ingresos.
Suggested Citation
Lukas Delgado-Prieto & Andrea Otero-Cortés & Andrés Calderón, 2024.
"The Impact of Hard Discount Stores on Local Labor Markets: Evidence from Colombia,"
Documentos de trabajo sobre Economía Regional y Urbana
326, Banco de la Republica de Colombia.
Handle:
RePEc:bdr:region:326
DOI: 10.32468/dtseru.326
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