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.