Working Paper: NBER ID: w23616
Authors: Sumit Agarwal; J. Bradford Jensen; Ferdinando Monte
Abstract: We study local employment, establishment density, and establishment size across industries delivering final consumption, which comprise a substantial fraction of production, shape local amenities, and pay different wages. In a stylized model of consumer mobility, lower industry storability/durability concentrates demand in space, increasing equilibrium employment. Credit card transactions data show that consumer mobility is limited and varies substantially across sectors; moreover, expenditure declines more rapidly with distance in sectors transacted more frequently. Lower storability/durability, proxied by average transaction frequency, increases a sector’s local employment via higher establishment density. Variation in consumer mobility is as economically significant as consumers’ expenditure shares.
Keywords: consumer mobility; local industries; employment structure; transaction frequency
JEL Codes: F1; F14; L8; R1; R2
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Higher local population (R23) | Increased employment in high-frequency sectors (J23) |
| Higher local population (R23) | Increased employment in low-frequency sectors (J29) |
| Higher local population (R23) | Higher establishment density (R38) |
| Higher local population (R23) | Reduced distances between consumers and stores (L81) |
| Presence of aquifers (Q25) | Quasirandom variation in population (C46) |
| Consumer mobility (J62) | Local employment structures in consumption industries (R32) |