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Does Wal-Mart Cause an Increase in Anti-Poverty Program Expenditures?

Author

Listed:
  • Michael J. Hicks

    (Air Force Institute of Technology)

Abstract
As the largest private sector employer in the United States, Wal-Mart experiences considerable scrutiny over its influence on a number of regional fiscal and economic issues. These include its impact on the local retail market structure, land use patterns, local fiscal conditions and general business practices. Criticism of Wal-Mart’s business practices include, but are not limited to its anti-unionization efforts, sale of imported goods, wage and compensation structure and the use of Federal and state anti-poverty transfers by its employees. In this paper I evaluate the concerns regarding the role of Wal-Mart in changing expenditures on Federal and state anti-poverty transfers in the United States. Using a panel of the conterminous 48 states, correcting for time and spatial autocorrelation and local government mix and policy changes, I find the number of Wal-Marts, and their employment share in the retail sector have no impact on Foodstamps expenditures. Expenditures on AFDC/TANF are unaffected by Wal-Mart in the test using the number of stores to represent Wal-Mart’s presence. In the retail employment share, the impact is negative, with a 1 percent increase in Wal-Mart’s share reduced AFDC/TANF expenditures by 3.3 percent. I find that Wal-Mart does increase Medicaid expenditures by roughly $898 per worker, which is consistent with other studies of the Medicaid costs per low wage worker across the United States.

Suggested Citation

  • Michael J. Hicks, 2005. "Does Wal-Mart Cause an Increase in Anti-Poverty Program Expenditures?," Public Economics 0511015, University Library of Munich, Germany.
    • Handle: RePEc:wpa:wuwppe:0511015
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    References listed on IDEAS

    as
    1. Emek Basker, 2005. "Job Creation or Destruction? Labor Market Effects of Wal-Mart Expansion," The Review of Economics and Statistics, MIT Press, vol. 87(1), pages 174-183, February.
    2. Terry F. Buss, 2001. "The Effect of State Tax Incentives on Economic Growth and Firm Location Decisions: An Overview of the Literature," Economic Development Quarterly, , vol. 15(1), pages 90-105, February.
    3. Konishi, Hideo, 2005. "Concentration of competing retail stores," Journal of Urban Economics, Elsevier, vol. 58(3), pages 488-512, November.
    4. Barnes, Nora Ganim & Connell, Allison & Hermenegildo, Lisa & Mattson, Lucinda, 1996. "Regional differences in the economic impact of Wal-Mart," Business Horizons, Elsevier, vol. 39(4), pages 21-25.
    5. Michael J. Hicks & Kristy Wilburn, 2005. "The Locational Impact of Wal-Mart Entrance: A Panel Study of the Retail Trade Sector in West Virginia," Urban/Regional 0511011, University Library of Munich, Germany.
    6. Robert I. Lerman & Kelly S. Mikelson, 2004. "Examining the Relationship between the EITC and Food Stamp Program Participation Among Households with Children," Econometric Society 2004 North American Summer Meetings 190, Econometric Society.
    7. Hicks, Michael J. & Wilburn, Kristy L., 2001. "The Regional Impact of Wal-Mart Entrance: A Panel Study of the Retail Trade Sector in West Virginia," The Review of Regional Studies, Southern Regional Science Association, vol. 31(3), pages 305-313, Winter.
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    Cited by:

    1. Vandegrift, Donald & Loyer, John & Kababik, David, 2011. "The effect of Walmart on the tax base: evidence from New Jersey," MPRA Paper 30937, University Library of Munich, Germany.
    2. Basker, Emek, 2011. "The Causes and Consequences of Wal-Mart’s Growth," Ekonomicheskaya Politika / Economic Policy, Russian Presidential Academy of National Economy and Public Administration, vol. 5, pages 110-134.
    3. Stephan J. Goetz & Sundar S. Shrestha, 2009. "Explaining Self‐Employment Success and Failure: Wal‐Mart Versus Starbucks, or Schumpeter Versus Putnam," Social Science Quarterly, Southwestern Social Science Association, vol. 90(1), pages 22-38, March.
    4. Donald Vandegrift & John Loyer, 2015. "The Effect Of Walmart And Target On The Tax Base: Evidence From New Jersey," Journal of Regional Science, Wiley Blackwell, vol. 55(2), pages 159-187, March.
    5. Alessandro Bonanno & Stephan J. Goetz, 2012. "WalMart and Local Economic Development," Economic Development Quarterly, , vol. 26(4), pages 285-297, November.

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    More about this item

    JEL classification:

    • D6 - Microeconomics - - Welfare Economics
    • D7 - Microeconomics - - Analysis of Collective Decision-Making
    • H - Public Economics

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