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

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 high-skilled 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.