82nd International Atlantic Economic Conference

October 13 - 16, 2016 | Washington, USA

Trends of Employment Agglomeration in U.S. Retail Trade Industries from 1998 to 2014

Sunday, October 16, 2016: 11:35 AM
Abdullah Khan, Ph.D. , School of Business Administration, Claflin University, Orangeburg, SC
This paper explores the trends in industrial agglomeration measured by geospatial concentration of employment in U.S. retail industries from 1998 to 2014. Analysis of retail industry’s employment agglomeration trends is important because when U.S. manufacturing industries are shedding jobs, service industries and retail industries continue to create jobs. With a total employment of 15.36 million employees retail trade industry is the third largest employment generating industry in the private sector preceded by professional and business services (19.1 million), and health care and social assistance (18.1 million). According to a Bureau of Labor Statistics study employment in this sector is projected to rise at 0.5 percent annually between the years 2014 and 2024.  At present this industry creates more employment opportunities than the U.S. manufacturing industry. According to industrial organization literature, with the right mix of policy support for physical infrastructure improvement and fiscal and monetary incentives entrepreneurs can tap into the positive externalities of goods pooling, labor pooling, and idea pooling by spatially co-locating via the process known as agglomeration.  This paper analyzes trends in agglomeration of employment in U.S. retail trade industry which can inform academicians and practitioners about relative geographic density of retail trade employment. This time period 1998-2014 is chosen so that the panel data is free from any potential data concordance related approximation that may occur in bridging pre-1997 data (reported under the Industrial Classification system) with post-1997 data (reported under the North American Industrial Classification System).  This paper analyzes agglomeration trends in U.S. retail trade industries in state level as well as in nine U.S. census divisions.