Author

Leyla Ziad

Document Type

Honors Capstone Project

Date of Submission

Spring 5-1-2011

Capstone Advisor

Chris Rohlfs

Honors Reader

Jeffrey Weinstein

Capstone Major

Economics

Capstone College

Management

Audio/Visual Component

no

Capstone Prize Winner

no

Won Capstone Funding

no

Honors Categories

Social Sciences

Subject Categories

Economic History | Economics | Economic Theory | Finance | Growth and Development

Abstract

As the largest private sector employer in the United States, corporate retail giant Walmart continues to make waves in United States culture and the economy since launching its first store in 1962. As Walmart seeks to expand, the validity of its consumer guarantee to “save money, live better” has been increasingly scrutinized, given Walmart’s use of controversial business practices, most notably its employee benefit policies and anti-unionization efforts. With over 1.4 million employees in the United States, there is much talk surrounding the potential costs of Walmart’s low prices. This study analyzes selected healthcare and unionization impacts of Walmart in various Metropolitan Statistical Areas across the United States during the years 1996 - 2004. Using cross-sectional data from the U.S. Census Bureau’s Current Population Survey, I perform an econometric analysis to evaluate the effect of the introduction of a Walmart store on Medicaid, Medicare, and private health insurance coverage as well as union membership and coverage. To address the endogeneity of Walmart’s decision to enter a particular area, I estimate a fixed effects model, controlling for year and Metropolitan Statistical Area effects. My results indicate that the introduction of a Walmart may initially appear beneficial through its creation of additional jobs and offering of low-priced goods. In addition, findings show that Walmart increases the probability of Medicaid and private health insurance coverage and has a negative effect on the probability of being a member of a union.

Creative Commons License

Creative Commons Attribution-Noncommercial-No Derivative Works 3.0 License
This work is licensed under a Creative Commons Attribution-Noncommercial-No Derivative Works 3.0 License.

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