Did Internet Kill the Retail Trade Star? Using Google Trends to Estimate the Impact of E-Commerce on Retail Employment

Within-state variation in the search frequency for “amazon” at Google is used to measure the industry specific impact of e-commerce on retail employment. To instrument for exogenous variation in e-commerce exposure, I rely on random variation in consumer’s use of the Internet for tasks like “porn” and “cat videos” as measured by Google Trends. My estimates suggest there are differential impacts of e-commerce across industries. E-commerce behaves as a technology that augments demand for labor in at least 11 of the 27 retail industry groups, while labor demand decreases in at least 9 of the retail industry groups.