CEP Discussion Paper No 664 December Sinking the Blues: the Impact of Shop Closing Hours on Labor and Product Markets.

Transcription

1 CEP Dicuion Paper No 664 Deceber 2004 Sinking the Blue: the Ipact of Shop Cloing Hour on Labor and Product Market Maarten Goo

2 Abtract There i a growing conenu aong econoit that extending hop opening hour create job. While thi i probably true in deregulating indutrie, thi paper argue there are oe deficiencie in the exiting hypothee about how exactly deregulation affect eployent. Firt, thi paper exploit recent change in Sunday Cloing Law in the US to find that total eployent, total revenue and the nuber of hop increae in deregulating indutrie and poibly decreae in non-deregulating indutrie. Second, a odel auing conuer like hopping on Sunday, onopolitic copetition and low barrier to entry i preented to how how conuer behavior and retail copetition can explain the oberved ipact of deregulation on retail labor and product arket and therefore ultiately eployent. JEL Claification: J23, L11, L81 Keyword: Shop opening hour, labor deand, organization of retail arket Thi paper wa produced a part of the Centre Labour Market Prograe. The Centre for Econoic Perforance i financed by the Econoic and Social Reearch Council. Acknowledgeent I would like to thank Mike Elby, Alan Manning, Barbara Petrongolo, Steve Pichke and einar participant at Princeton Univerity and the London School of Econoic for coent. I would alo like to thank all eber of the Indutrial Relation Section at Princeton Univerity for their generou hopitality and upport while writing thi paper. Any error are y own. Maarten Goo i an Occaional Reearch Aitant at the Centre for Econoic Perforance, London School of Econoic. E-ail addre for correpondence:.goo@le.ac.uk Publihed by Centre for Econoic Perforance London School of Econoic and Political Science Houghton Street London WC2A 2AE All right reerved. No part of thi publication ay be reproduced, tored in a retrieval yte or tranitted in any for or by any ean without the prior periion in writing of the publiher nor be iued to the public or circulated in any for other than that in which it i publihed. Requet for periion to reproduce any article or part of the Working Paper hould be ent to the editor at the above addre. M. Goo, ubitted 2004 ISBN

3 I. INTRODUCTION The perceived ipact of hop cloing hour on our econoy and work-life balance ha tood at the centre of nuerou public policy debate in any Wetern countrie. A a reult, the ajority of retriction on hop opening hour have been repealed or declared uncontitutional in ot US tate, the UK and Canada. 1 And in any European countrie where regulation till i the rule rather than the exception, the debate i looing. 2 A coon concern in cot-benefit analye of deregulation i it perceived ipact on eployent. It i therefore the ai of thi paper to hed oe light on how deregulation ot likely affect retail labor and product arket and therefore ultiately eployent. Thi paper firt exaine the ot coonly ipoed retriction on hop opening hour known a Sunday Cloing Law or Blue Law. 3 It i docuented that 10 US tate deregulated at oe point between 1977 and 1992 and 8 tate till had Sunday Cloing Law in It i thi variation in regulation between US tate at different point in tie that will erve to identify the ipact of hop cloing hour on retail labor and product arket. 1 For exaple, ee Section II for a dicuion of the hitory of Sunday Cloing Law in the US. See Maher [1995] for a hitory of Sunday Cloing Law in the UK and Skuterud [2004] for Canada. 2 For exaple, ee Kajalo [1997] for a dicuion of Sunday Cloing Law acro Europe. 3 There i diagreeent about the origin of the ter Blue Law. Soe clai it refer to the color of the paper upon which the firt law of New Haven were printed in New Haven ordered 500 hundred copie of it law to be printed in England. Thee printed law were returned on blue-colored paper. Other clai that the blue referred to by the ter blue law bear tetionial to the trictne with which the law were oberved by the Puritan. Jut a a true blue dye never fade, o a peron of fixed principle will not be eaily wayed to depart fro the. See Laband and Heinbuch [1987] for further dicuion. 2

4 Uing the Cenu of Retail Trade for 1997, thi paper then provide oe evidence that eployent, revenue and the nuber of hop in regulated indutrie are ignificantly aller in tate with Sunday Cloing Law. Thi i true looking at the fraction of total retail for regulated indutrie or coparing outcoe per 1000 inhabitant or per dollar of peronal dipoable incoe in each tate. To further tet thi hypothei, thi paper then turn to the Cenu of Retail Trade for year 1977, 1982, 1987 and It i hown that deregulation increae eployent with 4.4 to 6.4 percent, revenue with 3.9 to 10.7 percent and the nuber of hop with 1 to 1.5 percent. Thee etiate are rearkably robut uing different pecification and different data. Alo, oe uggetive evidence i hown for the hypothei that deregulation negatively affect eployent, revenue and the nuber of hop in indutrie exepted fro Sunday Cloing Law. Thi paper finally preent a odel building on tandard auption about retail arket to explain the oberved ipact of deregulation. For deregulating indutrie, it i argued that deregulation i likely to increae eployent becaue at leat one peron ha to be eployed at all opening tie (threhold labor effect). Alo, in o far the oberved increae in revenue due to increaed product deand reflect an increae in the volue of ale, eployent will further increae (ale effect). Finally, if the increae in revenue doinate the increae in labor cot, retailer will extend their opening hour and profit will increae. The nuber of hop will therefore increae if barrier to entry are low, further increaing eployent (profitability effect). However, to the extend that conuer ubtitute incoe toward deregulating indutrie, eployent loe elewhere will be larger the ore iportant i threhold labor, the tronger are 3

5 preference for Sunday hopping and the lower are entry barrier. In line with the epirical evidence, thee are the channel through which it i argued that deregulation affect retail labor and product arket and therefore ultiately eployent. There i a all but growing literature related to the idea that product arket regulation affect eployent. Krueger and Pichke [1997] argue that product arket contraint ay depre eployent growth. For exaple, they tate that zoning law (regulating the tart-up of copanie) ay have hapered eployent growth in any European countrie. To thi end, Bertrand and Kraarz [2002] exaine zoning law in the French retail indutry to conclude that retail eployent could have been ore than 10 percent higher in the abence of uch law. Siilarly, retrictive tore opening hour could partially explain why eployent in retail i relatively low. Thi hypothei ha recently been crutinized by Skuterud [2004] for Canada concluding that regulation decreae retail eployent with 5 to 12.5 percent. Siilarly, Burda and Weil [2001] etiate an eployent decreae of 2.5 percent fro regulation ainly uing repeated cro-ection of US tate. A a tateent about the ipact of hop cloing hour on eployent thee etiate are probably correct. But thi paper argue that iply looking at correlation between eployent and product arket regulation i not able to explain how exactly thee eployent change coe about. The reainder of the paper i organized a follow. Section II docuent the US hitory of Sunday Cloing Law. Section III decribe the ain data ued and Section IV how that eployent, revenue and the nuber of hop are ot likely to increae in deregulating indutrie and to decreae in indutrie exepted fro Sunday Cloing Law. Section V then tart fro what we know about retail arket to preent a odel 4

6 that predict the oberved ipact of deregulation on retail labor and product arket. The final ection conclude. II. SUNDAY CLOSING LAWS Sunday Cloing Law are an ancient intitution in Aerican law. The firt Sunday law paed on Aerican oil wa enacted by the Colony of Virginia in By the end of the 18 th Century, all thirteen colonie had Sunday cloing law written in their tatute. During the heyday of Sunday Cloing Law at the end of the 19 th Century, tate regulation of Sunday coerce wa o prevalent that 46 tate retricted at leat oe buinee to open on Sunday. 4 In 1961 Sunday Cloing Law were acribed the purpoe of ecuring a coon day of ret by the United State Supree Court, aking the binding in all reaining thirty-three tate. 5 However, the validity of Sunday Cloing Law in oe of thoe tate ha recently been challenged on the bai of their claification of buinee or cooditie covered by the law. 6 Conequently, a further 25 tate deregulated their Sunday Cloing Law between 1961 and Figure 1 how the 10 tate that 4 Dilloff [1980] and Laband and Heinbuch [1987] provide ore detail on the early hitory of Sunday cloing law in the US. 5 See Theuan [2004] for further detail of McGowan v Maryland, 366 U.S. 420 (1961) and it copanion cae. 6 Theuan [2004] further dicue tate and federal cae decided ince 1961 regarding the validity, contruction and effect of Sunday cloing law. 7 Figure 1 i not referring to Sunday Cloing Law that affect autoobile hop are hop elling alcohol on Sunday. The deciion wa ade to focu on general Sunday Cloing Law to avoid a patchwork of 5

7 deregulated between 1979 and 1997 (with date when tatute were repealed or declared uncontitutional) a well a all 8 tate that had Sunday Cloing Law in It i thi variation that will be exploited in thi paper to identify the ipact of hop cloing hour on retail labor and product arket. III. DATA The ain data ued in thi tudy i the Econoic Cenu of Retail Trade. The Cenu of Retail Trade i part of the Econoic Cenu conducted every five year ending in 2 or 7. The trength of the Cenu i that it ai to aple all retail activity in the US. Fro every urvey, total weekly eployent (nuber of paid eployee in the week including March 12), real total annual revenue, the nuber of etablihent and real total annual payroll are calculated for a nuber of indutrie in retail. The procedure for data collection and dieination can be found on the Cenu Bureau web-page. The firt ain dataet ued in thi tudy i the 1997 Cenu of Retail Trade. The advantage of thi data i that it eaure retail activity for narrowly defined NAICS indutrie. However, the ore precie NAICS claification introduced in 1997i no longer coparable with the SIC claification ued in earlier urvey. A econd coparability proble arie becaue the Cenu of Retail Trade for the firt tie include oe new tore type in For exaple, for the 1997 Cenu of Retail Trade legilation. It ee unlikely that Sunday opening iplie conuer buy ore car and the fraction of liquor tore in retail ee too all to largely affect activity in other tore. 8 Appendice A and B contain ore detailed legal reference. 6

8 include wholealer open to the general public uch a coputer hop, office upply dealer and building aterial tore. The econd ain data et ued in thi paper collect tate level data for the year 1977, 1982, 1987 and 1992 fro a variety of Cenu ource for 8 indutrie in retail. The trength of thi data i that it not only allow a coparion between tate and indutrie at one point in tie. However, one difficulty uing thi data i that inforation i available only for thoe 8 indutrie. A econd difficulty i that only eaure for every two conecutive year are coparable. Thi i due to change in the apling criteria and indutry claification between 1977 and 1982 and change in the indutry claification between 1982 and 1987 and 1987 and To thi end, the Cenu Bureau ha ade public two data et for 1982 and 1987, one coparable with the previou apling year and one coparable with the following apling year. IV. EMPIRICAL ANALYSIS Uing the 1997 Cenu of Retail Trade To ee whether hop cloing hour have any effect on retail labor and product arket, we firt ue the 1997 Cenu of Retail Trade. Table 1 provide oe inforation about the different type of hop in retail. The group of Regulated Indutrie conit of all indutrie prohibited to open on Sunday if a tate ha or would have Sunday Cloing Law. The reaining tore retailer are lited in the group of Other Indutrie. For thi group it i le clear whether the indutry of food tore and drug and propriety tore generally repreent hop ubject to or exepted fro Sunday Cloing Law. 7

9 However, the 1997 Cenu of Retail Trade contain inforation for ore narrowly defined hop type uch that thee indutrie can be broken down further. For exaple, Table 1 break down the group of food tore into uperarket, convenience tore and pecialty food tore. And even though uperarket ay alo ell food which generally i an exepted product, there ha been oe controvery about their Sunday opening. Unfortunately, it i alo uncertain whether convenience tore have alway been exepted fro Sunday Cloing Law uch that it i not iediately clear whether difference in retrictivene of Sunday Cloing Law between both type of food tore can be expected. 9 For drug and propriety tore the difference could be ore outpoken ince coetic, beauty and perfue tore ot often do not ell precription drug and have therefore otly been prohibited to open on Sunday in contrat to pharacie. Beide pharacie, the group of gaoline tation (often with convenience tore) i alo ore likely to generally repreent hop elling product exepted fro Sunday Cloing Law. The ore detailed indutry claification available fro the 1997 Cenu of Retail Trade therefore allow to exaine how regulation not only affect activity in regulated indutrie but alo hop exepted fro Sunday Cloing Law. The nuber in Table 1 are average percentage for each indutry acro tate. For the regulated indutrie, general erchandie tore (which are ainly departent tore) are the larget eployer. Average tore ize in ter of eployent i relatively large for general erchandie tore wherea icellaneou retail tore ee relatively all. For other indutrie, food tore are the econd bigget eployer and Table 1 9 See Theuan [2004] for a nuber of cae. 8

10 how that the ajority i eployed in relatively few uperarket wherea ga tation are relatively all. All in all, thee finding do not ee counter intuitive. Table 1 give ean percentage pooling tate with and without Sunday Cloing Law. To get an idea whether regulation ha any ipact, one would like to ee whether thee ean differ ignificantly between tate with and without Sunday Cloing Law. Thi i done in Table 2. The firt row of Table 2 give the ean percentage for all regulated indutrie in tate with Sunday Cloing Law. The econd row calculate ean percentage for the ae indutrie in tate without Sunday Cloing Law. The third row calculate the ean difference between the firt and the econd row, uggeting regulated indutrie are relatively aller in tate with Sunday Cloing Law. The final row of Table 2 report thee difference a a fraction of the firt row. What thee fraction ugget i that regulation could reduce eployent with 6 percent and revenue and the nuber of hop with 7 percent in regulated indutrie. Alo note that if other indutrie in tate with Sunday Cloing Law are indirectly affected by uch law, the etiated difference neverthele ugget oe ipact of regulation on retail labor and product arket. A further tet for thi hypothei i to ee whether ean difference exit per 1000 inhabitant. The reult are found in the top panel of Table 3. The firt row ugget that in regulated indutrie, regulation decreae eployent with 2.5 worker per 1000 inhabitant, decreae annual expenditure with $603 per inhabitant per year and decreae the nuber of hop with per 1000 inhabitant. The low tandard error ugget the difference are tatitically ignificant except for the nuber of hop. To ee whether tate with and without Sunday Cloing Law do not differ for other reaon, one can 9

11 copare the etiated ean difference for regulated indutrie given in the firt row of Table 3 with ean difference for other indutrie given in the econd row of Table 3. If retail i generally larger in regulated tate a uggeted by the ean difference for other indutrie, the difference-in-difference given in the third row of Table 3 ugget that regulation decreae eployent with 3.4 job per 1000 inhabitant, decreae annual expenditure with $565 per inhabitant and decreae the nuber of hop with 0.3 per 1000 inhabitant in regulated indutrie. Rather than coparing difference per 1000 inhabitant in each tate, the botto panel of Table 3 copare ean difference per dollar of peronal dipoable. To allow for the nuber to be roughly coparable to thoe preented in the top panel, all ean are ultiplied with average incoe per 1000 inhabitant. The final row of Table 3 etiate that regulation could decreae annual expenditure with $458 per average incoe and depre eployent and the nuber of hop with 2.4 and 0.19 per $21.7 repectively. Note that thee difference are relatively iilar to thoe preented in the top panel of Table 3. A final check i to ee whether difference between tate with and without Sunday Cloing Law are iilar for ore type of hop. For regulated indutrie, Table 4 give ean difference iilar to thoe preented in Table 3 for annual revenue uing both the population and incoe noralization. Table 4 ugget thee difference are roughly iilar for different regulated indutrie. The reult in Table 4 ugget that conuer pend le ainly on building aterial and garden tore and furniture and hoe furnihing tore in regulated tate. Alo intereting are the etiated difference for other indutrie given in Table 5. Table 5 how that the difference for pharacie 10

12 and drug tore are poitive wherea the difference for coetic, beauty and perfue tore are negative. Thee oppoing ign could indicate that regulation negatively affect ale in regulated hop but poitively affect ale in exepted tore. Alo, the difference for gaoline tation are poitive and relatively large. Thee etiate are not inconitent with the hypothei that conuer ubtitute incoe away fro regulated hop toward tore exepted fro uch regulation. To conclude, a iple cro-ection analyi learned that regulation ot likely reduce eployent, revenue and the nuber of hop in regulated indutrie. Moreover, oe evidence wa hown for the hypothei that regulation increae eployent, revenue and the nuber of hop in indutrie exepted fro Sunday Cloing Law. Uing the Cenu of Retail Trade To further provide evidence for the hypothei that deregulation ha an ipact on retail labor and product arket, Cenu of Retail Trade data for year 1977, 1982, 1987 and 1992 have been collected. Table 6 uarize thee data. The indutrie lited a Deregulating Indutrie are roughly iilar to thoe in the 1997 Cenu of Retail Trade except for the group of icellaneou retailer which ha now been lited under Other Indutrie. The reaon for doing o i that the ore aggregate indutry claification ued by the Cenu Bureau before 1997 doe not allow excluding the non-tore retailer fro thi group. Becaue etiate for ore narrowly defined hop are not available before 1997, not uch can therefore be aid a priori about whether other indutrie generally repreent regulated or non-regulated tore, except for gaoline ervice tation. 11

13 The ean percentage in Table 6 are calculated after pooling all year and the reported tandard error therefore reflect variation in the indutry copoition between tate. Soe preliinary reult Jut a in the previou ection, one can copare ean percentage for deregulating indutrie between tate with and without Sunday Cloing Law to ee whether deregulation ha any long-run ipact. Table 7 how thee difference for each Cenu apling year between 1977and 1992 a a fraction of the ean percentage for tate with Sunday Cloing Law. All etiate are poitive uggeting deregulation increae eployent with about 2 percent, increae revenue with 3 to 5 percent and the nuber of hop with 1 to 2 percent in deregulating indutrie. Alo note thee etiate are oewhat aller but not very different fro thoe reported in the botto row of Table 2. One proble with uing each Cenu wave eparately i that it i difficult to identify the caual ipact of deregulation fro a cro-ection of tate and indutrie. The reainder of thi ection therefore ue the different tiing of deregulation for thoe tate that deregulated between 1979 and 1992 (note fro Figure 1 that no tate deregulated between 1992 and 1997) to exaine the ipact of deregulation uing the Cenu of Retail Trade a a panel. In order to do o, an iportant quetion i to which extend the Cenu apling coincide with the tiing of deregulation. The firt colun of Table 8 lit all the tate that deregulated between 1977 and 1992 a hown in 12

14 Figure The grey area on the horizontal axi are the Cenu apling year and the croe reflect the effective date of deregulation in each tate. Depending on how long the ipact of deregulation take to coplete, the group that deregulated by 1980 wa ot likely affected during the period Siilarly, the ipact period for the group that deregulated by 1983 i ot likely to be and for the group that deregulated by 1987 it i the period To the extend that deregulation caued poitive change outide thee perceived treatent period, the etiated return to deregulation will be attenuated during the ipact period and upward biaed in other period. A a firt tet whether deregulation ha had any ipact at all, Table 9 copare outcoe in deregulating indutrie with the ae indutrie in non-deregulating tate and other indutrie in every other tate. Thi i done uing the following pecification in each period: with (1) yi = β 0 + β1i i + A + Bi + ε i yi the change in the log of eployent, revenue or the nuber of hop in indutry i and tate and with I i a duy equal to 1 if indutry i in tate deregulated in that period. Ter A and B i further capture tate and indutry fixed effect repectively. The firt pecification ued in colun (1), (4) and (7) of Table 9 exclude the tate duie fro (1). For each dependent variable the etiated return are different in each tie period and oetie even negative. One explanation for the oberved 10 Excluded are North Dakota and Miouri. North Dakota i excluded becaue it only deregulated in Miouri i excluded becaue deregulation in 1979 iplied countie could opt-out of tate regulation. Thi happened gradually with 34 countie chooing to opt-out between 1979 and 1985, a further 19 countie between 1986 and 1990 and 12 countie opted-out between 1991 and See Appendix B for ore detail. 13

15 difference in point etiate i the enitivity of retail activity to acroeconoic hock and cycle and the fact that there i ubtantial geographical diperion of hock and cycle within the US. 11 For exaple, the aller point etiate for the period can partially be explained by that the receion in the late 1970 otly affecting a band of tate jut eat of the Miiippi running fro the Great Lake to the Gulf of Mexico including deregulating tate Pennylvania and to a leer extend New Jerey. The higher point etiate found for the period can be explained by the rapid expanion of the New England econoy including deregulating tate Maachuett and to oe extend Veront. Finally, the lower point etiate for the period partially reflect the plunge in oil and ga price in the econd half of the 1980 that truck the natural-reource-baed tate in the South Central, epecially deregulating tate Louiiana and Texa. It ee therefore iportant to control for aggregate difference between tate in iolating the caual ipact of deregulating Sunday Cloing Law. To thi end, colun (2), (5) and (8) of Table (9) include tate duie, jut a in equation (1). The point etiate are now all poitive and range between 3.5 to 6 percent for eployent, 4.5 and 10 percent for ale and 1 and 2 percent for the nuber of hop. Note that thee nuber are roughly iilar to thoe reported in the botto row of Table 2 and Table 7. Finally, to ee whether tate duie ainly take out variation between tate due to difference in econoic ucce, colun (3), (6) and (9) of Table (9) replace the tate duie with difference in the log of the tate wide uneployent rate, peronal dipoable incoe and population. Alo, becaue thee control ee to vary iilarly between the 5 geographical diviion ued by the Cenu Bureau, region 11 See Dzialo, Shank and Sith [1993] for a dicuion of how different acro econoic hock and cycle have affected different region in the US between 1977 and

16 duie are alo added a additional control to potentially exclude further bia. The point etiate are very iilar to thoe obtained uing the tate duie indeed. The ipact of deregulation on eployent, revenue and the nuber of hop The etiate in Table 9 do not necearily reflect the true return to deregulation for deregulating indutrie if alo other indutrie are indirectly affected by deregulation. To thi end, conider the following pecification uing only the aple of deregulating indutrie in each period: with (2) yi = β 0 + β1i i + β 2 X + Ar + Bi + ε i X the change in the log of the uneployent rate, peronal dipoable incoe and population for that period and with A r a et of 5 region duie. Ter X and A r are included ince the reult in Table 9 uggeted thee control take out a potential bia in the etiated return in cae no tate duie can be added. Alo note that relative to equation (1), equation (2) further provide a pecification tet in that all right-hand ide coefficient are now pecific to deregulating indutrie, jut like the coefficient of interet β 1. Etiate uing equation (2) are given in Table 10. The point etiate ugget that deregulation increae eployent with 4.5 to 6.5 percent, revenue with 4 to 10 percent and the nuber of hop with 1 to 1.5 percent in deregulating indutrie. Clutered tandard error reveal any of the etiated return are tatitically ignificant. Three point can be ade about the oberved ipact of deregulation. Firt, the etiated return are iilar to thoe reported in earlier table depite the different ethod or pecification ued or the poible eaureent error in the tiing of deregulation. 15

17 Second, the etiated return are relatively large. For exaple, our data ugget that the average cyclical upwing increae revenue with about 20 to 30 percent. Finally, the iilarity of point etiate between Table 9 and 10 alo ugget that the etiated return for other indutrie are largely inignificant (which upon further inpection ee to be true). If anything, note thi i conitent with the evidence preented in Table 5 that deregulation ight have a negative ipact on retail labor and product arket in ore narrowly defined exepted indutrie. To conclude, etiate o far ugget deregulation i likely to have an ipact on retail labor and product arket. Following deregulation, eployent i expected to increae with 4.4 to 6.4 percent, revenue with 3.9 to 10.7 percent and the nuber of hop with 1 to 1.5 percent in deregulating indutrie. Alo, the reult preented here are not inconitent with the hypothei put forward earlier that deregulation poibly ha a negative ipact on labor and product arket in exepted indutrie. Soe robutne check For each group of deregulating tate, Table 10 aued the period of ipact wa eaured accurately. If thi i the cae, no ipact of deregulation hould be oberved in other period. Figure 2 therefore plot the point etiate in Table 10 together with point etiate for other period. For exaple, the firt three bar in the top panel of Figure 2 draw the point etiate given in the top panel of Table 10. The next three bar etiate the return to deregulation for tate that deregulated by 1980 for the period and o forth. It i clear fro Figure 2 that the etiated return in Table 10 do not ee 16

18 largely affected by differing trend or that eaureent error in the tiing of deregulation. Wherea ot of the point etiate in Table 10 are between 1 and 5 percent, etiated eployent and revenue growth in Maachuett and Veront ee relatively large. Thi could either ugget that the etiate i upward biaed or that deregulation did iply a larger change in thee tate (aybe due to the econoic boo in the North Eat when deregulation took place). To further exaine thi, Figure 3 ue an alternative data et. The figure ue an annualized eaure of real retail revenue derived fro the Monthly Retail Trade Survey between 1978 and Unfortunately, thee hitorical erie are only available for a nuber of tate but a ueful coparion between Maachuett (which deregulated in Deceber 1982) and neighboring tate New York can be ade. The top panel of Figure 3 give the raw difference between both tate. The top panel ugget a difference-in-difference between 1982 and 1987 of about 10 percent, iilar to the point etiate given in Table 10. But one concern i the poibility that the difference-in-difference between 1982 and 1992 of about 3 percent i the better long-run eaure of tructural change. The botto panel of Figure 3 therefore draw the erie adjuted for change in the uneployent rate, peronal dipoable incoe and population. The regreion adjuted erie ugget that deregulation did have a peritent and relatively large ipact of 7 to 8 percent on retail revenue in Maachuett. An intereting quetion i which indutrie gain ot fro deregulation. Table 11 therefore ue the following pecification for each of 4 deregulating indutrie in each period: 17

19 with (3) y = β 0 + β1i + β 2 X + Ar + ε y the change in the log of annual revenue. Rearkably, the larget ipact i etiated for the group building aterial and garden tore, furniture and hoe furnihing tore and clothe tore, jut a in Table 5. Maybe an intuitive explanation for thee reult i that Sunday opening increae activity in hoe and garden related activitie becaue that i what conuer do on Sunday. Alternatively, the increae in clothe tore ight ugget that oe conuer regard Sunday hopping a a preferable patie activity. Thi intuition will return when the next ection preent a odel in order to undertand the oberved ipact of deregulation. The ipact of deregulation on average weekly wage One iue ignored o far ha been the poible ipact of deregulation on wage. Table 12 therefore ue pecification (2) to exaine the ipact of deregulation on average weekly wage in deregulating indutrie. Thi i ade poible becaue the Cenu of Retail Trade alo provide a eaure of annual payroll. Coparing the percentage change in eployent with the percentage change in annual payroll it i then poible to ay oething about the ipact of deregulation on average weekly wage. The firt colun of Table 12 reproduce the point etiate found in the firt colun of Table 10. The econd colun in Table 12 give point etiate for annual payroll. The point etiate are very iilar and if anything oewhat larger for the payroll data indicating a all but inignificant increae in average weekly wage. Thi i conitent with the hypothei that deregulation increae product deand and therefore labor deand a will be argued next. 18

20 V. A MODEL TO ANALYZE THE IMPACT OF EXTENDING OPENING HOURS ON LABOR AND PRODUCT MARKETS Throughout thi ection, it i aued that each hop ha oe arket power by offering a differentiated product and that in the long-run barrier to entry are low. Building on thee and other tandard auption about retail arket, thi ection then provide a fraework to explain the oberved ipact of deregulation by accounting for change in conuer behavior, retail copetition and ultiately labor deand. We will conider the cae of Sunday opening, although the odel equally applie to any extenion of opening tie. The odel preented here i inforal and a ore technical expoition can be found in Appendix C. The ipact of extending opening hour on eployent and ale Epirical evidence ugget that eployent cot in retail vary with opening tie and the volue of ale (Nooteboo [1982, 1983] and Thurik [1982]). The idea that part of labor cot only vary with opening tie can be jutified by noting that one ut eploy at leat one worker at all tie. Furtherore, there ee to be coniderable epirical evidence in favor of contant arginal labor cot. Total labor cot per week therefore write a (4) C = c D c X D + X 19

21 with cd threhold labor cot per day, D the nuber of opening day a week, c X contant arginal labor cot and X the volue of weekly ale. Weekly eployent i then given by (5) N = n D n X D + X with n D threhold labor per day and n X invere arginal labor productivity. 12 The ipact of Sunday opening on weekly eployent can then be analyzed through an increae of D in (5). If conuer only inter-teporally ubtitute incoe fro other day of the week to Sunday, the volue of weekly ale doe not increae after deregulation and weekly eployent only increae with the additional required threhold labor (threhold labor effect). But derived deand in (5) alo learn that if deregulation iplie an increae in the volue of ale, eployent further increae (ale effect). A ale effect could be expected if conuer have a tate for Sunday hopping. If thi i the cae, conuer are willing to pay the price for thi new good and total revenue in deregulating indutrie will increae. The previou ection provided oe direct evidence for thi hypothei. And to the extend an increae in revenue 12 Equation (4) and (5) are related by that c D = wn D and c X = wn X with w the wage per unit of tie (and abtracting fro other cot ite related to opening tie and ale). For exaple, aue that weekly ale are given by X = 1 n X ( N n D D ) if N trictly exceed the required aount of threhold labor and zero otherwie. Beide a tandard production function, thi relationhip can alo reflect a firt order approxiation to Nooteboo [1983] ioene (equal-waiting curve). In Nooteboo odel, eployent depend poitively on ale ince fir want to keep the relative waiting tie (average waiting tie relative to the average ervice tie per cutoer) at approxiately n. Thi give the following expreion for labor deand: X N = n D D + n if X > 1/n X and zero otherwie. Integrating over wage then give (4). x X 20

22 reflect an increae in the volue of ale, a ale effect ut partially explain the oberved increae in eployent. 13 Moreover, the next ection argue that if the ale effect i ufficiently large, Sunday opening will increae retail profitability and therefore the nuber of hop. The ipact of extending opening hour on retail profitability If the increae in total revenue outweigh the increae in labor cot, profit will increae and retailer will decide to open on Sunday. 14 If barrier to entry are low, the nuber of hop will therefore increae in the long-run until all profit are exhauted. 13 Whether the increae in total revenue i driven by an increae in price or the volue of ale (or both) ultiately depend on how retailer et price given deand for their product and retailing cot. Skuterud [2004] and Burda and Weil [2001] find oe evidence that price arginally increae after deregulation. In general, there i a all literature that look at the ipact of deregulation on price uing different auption about how retailer et price, product deand and retailing cot. According to Indert and Iren [2004], the theoretical literature i divided about whether price hould increae or decreae after deregulation. In any cae, the epirical and theoretical analyi preented in thi paper i conitent with either of both. 14 If threhold labor cot are too high, it i not iediately clear why retailer would decide to extend their opening hour. Alternatively, one could think of oe odel that aue deregulation will be effective even if it i not profitable to do o for retailer in the hort-run. Firt, if Sunday opening oothe conuption acro day of the week and arginal labor productivity i ufficiently decreaing in ale, cot aving in idweek outweigh the total cot of Sunday opening. However, the required concavity in the production of daily labor doe not ee very likely given the epirical evidence in favor of (5). Moreover, even if the production of daily labor i ufficiently concave, it i then not iediately clear why deregulation would increae eployent. Second, Sunday opening could increae hop pace utilization or could even iply that optial hop ize becoe aller becaue of a reduction in peak deand. If thee cot aving outweigh the additional cot of Sunday opening, retailer will find it profitable to extend their opening hour even if weekly revenue i not increaed. However, ince thee aving will only be realized when hop pace i no longer unk, it i not iediately clear why hop would extend their opening hour iediately after deregulation or even in the long-run. Finally, Sunday opening could relate to fear of loing too any cutoer to other hop when reaining cloed. However, it then reain a quetion how hop can increae revenue to bear the cot of Sunday opening. 21

23 Given that conuer have a ufficiently trong tate for Sunday hopping, eployent i therefore likely to increae not jut becaue of increaed threhold labor and an increae in the volue of ale but alo an increae in the nuber of hop (profitability effect). Auing all hop are identical for iplicity, thi i eaily een ince total labor deand in the teady tate i given by (6) SN = n SD n SX. D + X If an increae in D increae S and X, total eployent will unabiguouly increae. Equation (6) ugget 3 poible channel through which deregulation can increae eployent. Firt, deregulation directly increae eployent through an increae in threhold labor. Second, deregulation will be effective if it i profitable for retailer to open on Sunday or if conuer have ufficiently trong tate for Sunday hopping. In o far the increae in total revenue reflect an increae in the volue of ale, eployent will further increae. Finally, increaed profit will increae hop tartup in the long-run until all profit are exhauted. To uarize, if conuer have ufficiently trong tate for Sunday hopping, deregulation will increae eployent in deregulating indutrie becaue of increaed threhold labor (threhold labor effect) but alo becaue of an increae in the total volue of ale (ale effect) and the nuber of hop in the long-run (profitability effect). The expected ipact of deregulation on eployent in deregulating indutrie ut therefore be analyzed accounting for it ipact on retail labor and product arket. Eployent gain are expected to be larger if conuer have trong tate for Sunday hopping, threhold labor i iportant (but not too iportant uch that it i no longer profitable for retailer to open on Sunday) and low barrier to entry. 22

24 The ipact of extending hop opening hour on deregulating and nonderegulating indutrie If conuer ue Sunday a a day for ore hopping, total expenditure in deregulating hop will increae. However, thi iplie an unabiguou decreae in expenditure on other good or ervice in other indutrie if total incoe doe not increae. Deregulation i therefore expected to have a negative ipact on total revenue, the nuber of hop and therefore eployent in other indutrie. Soe evidence for thi hypothei wa preented above. To allow for thi poibility, aue two type of hop exit: type hop for which opening hour are being deregulated and type hop for which opening hour are not being deregulated. Type hop can either reain prohibited to trade on Sunday after deregulation or be exepted fro Sunday Cloing Law before deregulation. Denote the nuber of type hop a S and the nuber of type hop a M. Alo aue for iplicity all type hop and all type hop are identical but type and type hop can have different cot paraeter. The olid line in Figure 4 are the long-run zero-profit curve for type hop (vertical axi) and type hop (horizontal axi) before deregulation. Firt, the intercept S M=0 and M S=0 are aued to be finite and to depend poitively on peronal dipoable incoe and negatively on threhold labor cot. Second, the zero-profit curve are aued to be downward loping for S and M trictly poitive. To ee thi, conider the zero-profit curve for type hop. If type and type good are ubtitute, an increae in M require a decreae in the total fraction of incoe pent on type good. 23

25 Conequently, higher M reduce profitability in type indutrie which decreae S. Finally, Figure 4 how the interection of the zero-profit curve deterine the equilibriu nuber of hop S* and M* before deregulation. 15 Auing peronal dipoable incoe i contant, deregulation decreae fro S M=0 to S M=0 becaue of increaed total threhold labor cot. But deregulation alo rotate upward the zero-profit curve for type hop around S M=0 and rotate inward the zero-profit curve for type hop around M S=0. The zero-profit curve for type hop rotate upward and for type hop rotate inward becaue conuer pend a larger fraction of total incoe on type good after deregulation. Thi rotating will be ore outpoken the tronger are conuer preference for Sunday hopping and the ore ubtitutable product are between type and type hop. Alo note that the zero-profit curve rotate around their intercept becaue the intercept do not change if peronal dipoable incoe i contant. A new equilibriu i reached at (S**,M**). Becaue S** ut lie on the zeroprofit curve for type hop that ha hifted upward, total expenditure on type good ut increae. Moreover, if it i profitable for retailer to open on Sunday, the increae in total revenue outweigh the increae in threhold labor cot and S**>S*. In thi cae, 15 An iportant quetion i whether the analyi a drawn in Figure 4 can exit under tandard auption about retailing cot, conuer preference and retailer behavior. Appendix C forally derive the analyi uarized in Figure 4 uing a Dixit-Stiglitz type odel of onopolitic copetition auing labor cot are a in (4). The appendix tart fro CES repreentative utility incorporating both type of hop, the nuber of hop for each type and the nuber of opening day for each hop in the utility function. Beide the tandard Dixit-Stiglitz retriction on the utility paraeter, the appendix proof that for a unique table equilibriu to exit it i ufficient to aue the ubtitutability of good between hop of different type i le than the ubtitutability between good of iilar type. Thi auption doe not ee too retrictive. The appendix then how that the ipact of deregulation i a hown in Figure 4. 24

26 eployent in deregulating indutrie will increae becaue of an increae in threhold labor (threhold labor effect), total revenue (ale effect) and the nuber of hop (profitability effect). However, the inward rotation of the zero-profit curve for type hop reflect an unabiguou decreae in total expenditure on type good. In the hort-run, oe type hop will ake loe and eventually the nuber of type hop unabiguouly decreae. The decreae in total revenue and the nuber of hop predict eployent in non-deregulating indutrie will fall. In analogy with the eployent gain in deregulating indutrie, the eployent loe in other indutrie will be larger if conuer have a trong tate for Sunday hopping, threhold labor i iportant and barrier to entry are low. The ipact of deregulation on wage and price So far thi ection ha ignored the poibility that deregulation alo affect wage. The evidence preented in the previou ection uggeted that if anything wage would increae becaue of an increae in product and therefore labor deand. If wage increae ignificantly (aybe becaue of legally ipoed requireent for working irregular hour), threhold labor cot and arginal labor cot will increae. It then i traightforward to how that the increae (decreae) in total revenue, the nuber of hop and therefore eployent in deregulating (non-deregulating) indutrie will be aller. Finally, note that the analyi aued that all type hop et a unique price and all type hop et a unique price before and after deregulation. 16 However, in o far the 16 In the odel preented in Appendix C retailer perceive deand to be io-elatic and charge a contant ark-up over arginal cot. Deregulation therefore ha no ipact on the price et by each retailer. 25

27 oberved increae in total revenue reflect an increae in the price of deregulated good, the expected ipact of deregulation on eployent will be aller. Alo note that the analyi in Figure 4 explicitly account for the poibility that deregulation affect aggregate price ince Figure 4 allow for type and type hop to charge different price in equilibriu. For exaple, aue labor productivity in type hop i higher than in type hop uch that type hop charge a lower price. In thi cae, part of the increae in S and decreae in M i explained by conuer ubtituting incoe toward deregulating indutrie becaue type worker are ore productive. The ore productive type worker are, the bigger will be the gain (loe) for type (type ) indutrie, the bigger will be the increae in average productivity and the bigger will the decreae in the aggregate price index. VI. CONCLUSIONS Thi paper ha argued there are iportant deficiencie in our undertanding of how hop cloing hour affect eployent in retail indutrie. Uing a nuber of data et and a nuber of different technique, it wa firt hown that regulation ot likely decreae eployent with 4.4 to 6.4 percent, revenue with 3.9 to 10.7 percent and the nuber of hop with 1 to 2 percent in regulated indutrie. Soe evidence alo uggeted regulation increae eployent, revenue and the nuber of hop in indutrie exepted fro uch law. Thi paper then provided a fraework in which the oberved ipact of regulation could be undertood. If total dipoable incoe i contant, it wa argued that eployent in regulated indutrie i lower the ore iportant i 26

28 threhold labor (threhold labor effect), the ore conuer ubtitute incoe toward exepted indutrie (ale effect) and the lower are barrier to entry (profitability effect). However, it wa alo argued that eployent in exepted indutrie will be higher for iilar reaon. In any debate about the ipact of deregulation, it ee therefore iportant to iultaneouly account for it expected ipact on retail labor and product arket and therefore ultiately eployent. 27

29 Reference Bertrand, M. and F. Kraarz [2002], Doe Entry Regulation Hinder Job Creation?: Evidence fro the French Retail Indutry, Quarterly Journal of Econoic, Vol. 117 no. 4, pp Burda, M. and P. Weil [2001], Blue Law, ieo Huboldt-Univerity of Berlin. Diloff, N. J. [1980], Never on a Sunday: The Blue Law Controvery, The Maryland Law Review, Vol. 39 no. 4, pp Dixit, A. K. and J. E. Stiglitz [1977], Monopolitic Copetition and Optiu Product Diverity, The Aerican Econoic Review, Vol. 67 no. 3, pp Dzialo, M.C., Shank, S.E. and D.C. Sith [1993], Atlantic and Pacific Coat Labor Market Hit Hard in Early 1990, Monthly Labor Review, February 1993, pp Gradu, R H. J..M. [1996], The Econoic Effect of Extending Shop Opening Hour, Journal of Econoic, vol. 64 no.3, pp Indert, R. and A. Iren [2004], Shopping Hour and Price Copetition, forthcoing in The European Econoic Review. Kajalo, S. [1997], Sunday Trading, Conuer Culture, and Shopping Will Europe Sacrifice Sunday to Recreational Shopping?, ieo Helinki School of Econoic, pp.18. Krueger, A.B. and J.S. Pichke [1997], Obervation and Conjecture on the U.S. Eployent Miracle, NBER Working Paper Laband, D.N. and D.H. Heinbuch [1987], Blue Law: Hitory, Econoic and Politic of Sunday- Cloing Law. Maher, Ielda (1995), The New Sunday: Reregulating Sunday Trading, Modern Law Review, 58: Mortier, J.T [2003]., Working and Growing Up in Aerica, Harvard Univerity Pre, pp Nooteboo [1982], A New Theory of Retailing Cot, European Econoic Review, 17, pp Nooteboo [1983], Trading Hour and Econoie of Scale in Retailing, European Sall Buine Journal, 1 (2). OECD [1997], Regulation and Perforance in the Ditribution Sector, Econoic Departent Working Paper 180. Preer, H. [2003], Working in a 24/7 Econoy: Challenge for Aerican Failie, Ruell Sage Foundation Publication, New York. Skuterud (2004), The Ipact of Sunday Shopping on Eployent and Hour of Work in the Retail Indutry: Evidence fro Canada, forthcoing The European Econoic Review. Theuan, J. E. [2004], Validity, Contruction, and Effect of Sunday Cloing or Blue Law Modern Statu, Aerican Law Report, ALR4th. Thurik (1982), Labour Productivity in French Superarket, Report 8210/S of Erau Univerity, Rotterda. 28

30 Table 1 Percentage of Total Retail by Indutry, 1997 Weekly Eployent Annual Revenue Nuber of Shop Regulated Indutrie Building aterial and garden tore (1.429) (2.730) (2.037) General erchandie tore (3.481) (3.434) (1.163) Apparel and acceory tore (2.478) (2.592) (3.239) Furniture and hoe furnihing tore (1.055) (1.639) (1.340) Micellaneou retail tore (2.094) (1.262) (3.346) Other Indutrie Food tore (3.026) (2.694) (2.532) Superarket and other grocery tore (2.679) (2.391) (1.321) Convenience tore (0.904) (0.634) (1.442) Specialty food tore (0.450) (0.324) (0.952) Drug and propriety tore (1.809) (1.906) (1.381) Coetic, beauty and perfue tore (0.340) (0.242) (0.859) Pharacie and drug tore (1.684) (1.811) (1.201) Gaoline ervice tation (2.709) (3.047) (3.284) Note: Data are taken fro the 1997 Cenu of Retail Trade. Weekly Eployent eaure the nuber of paid eployee in the week including March 12. Lited indutrie are defined uing NAICS indutry claification. The percentage are ean percentage acro all tate and the tandard error in bracket reflect variation in the indutry copoition in retail acro all tate. 29

31 Table 2 Mean Percentage of Total Retail for Regulated Indutrie in State with and without Sunday Cloing Law, 1997 Weekly Eployent Annual Revenue Nuber of Shop I. State with Sunday Cloing Law (1.145) (1.363) (0.798) II. State without Sunday Cloing Law (0.608) (0.518) (0.598) I - II (1.410) (1.273) (1.341) (I -II)/ I (0.023) (0.022) (0.020) Note: Data are taken fro the 1997 Cenu of Retail Trade. The nuber in bracket are tandard error. For the grouping of tate into thoe with and without Sunday Cloing Law, ee Appendix A. 30

32 Table 3 Mean Difference in State with and without Sunday Cloing Law, 1997 Weekly Eployent Annual Revenue ($1000) Nuber of Shop Per 1000 inhabitant Regulated Indutrie (1.090) (192.2) (0.158) Other Indutrie (0.202) (20.79) (0.021) Difference-in-difference (0.914) (100.4) (0.099) Per $21.7 of peronal dipoable incoe Regulated Indutrie (1.822) (235.9) (0.228) Other Indutrie (1.323) (133.8) (0.141) Difference-in-difference (2.252) (271.2) (0.268) Note: Data are taken fro the 1997 Cenu of Retail Trade. The nuber are ean difference of percentage between tate with and without Sunday Cloing Law. The nuber in bracket are tandard error. For the grouping of tate into thoe with and without Sunday Cloing Law, ee Appendix A. 31

33 Table 4 Difference in Mean for Annual Revenue (in thouand of $) in State with and without Sunday Cloing Law for each Regulated Indutry, 1997 Per 1000 inhabitant Per $21.7 of PDI Building aterial and garden tore (83.12) (107.3) General erchandie tore (107.7) (135.1) Apparel and acceory tore (84.55) (71.56) Furniture and hoe furnihing tore (48.18) (41.50) Micellaneou retail tore (11.63) (11.48) Note: Data are taken fro the 1997 Cenu of Retail Trade. The nuber are ean difference of percentage between tate with and without Sunday Cloing Law. The nuber in bracket are tandard error. For the grouping of tate into thoe with and without Sunday Cloing Law, ee Appendix A. 32

34 Table 5 Difference in Mean for Annual Revenue in State with and without Sunday Cloing Law for each Other Indutry, 1997 Per 1000 inhabitant Per $21.7 of PDI Food tore (88.23) (74.36) Superarket and other grocery tore (79.20) (74.09) Convenience tore (19.01) (17.39) Specialty food tore (8.210) (6.880) Drug and propriety tore (48.08) (40.29) Coetic, beauty and perfue tore (1.663) (1.452) Pharacie and drug tore (45.20) (38.68) Gaoline ervice tation (77.60) (106.2) Note: Data are taken fro the 1997 Cenu of Retail Trade. The nuber are ean difference of percentage between tate with and without Sunday Cloing Law. The nuber in bracket are tandard error. For the grouping of tate into thoe with and without Sunday Cloing Law, ee Appendix A. 33

35 Table 6 Percentage of Total Retail by Indutry, Weekly eployent Annual Revenue Nuber of Shop Deregulating Indutrie Building aterial and garden tore (1.179) (1.719) (1.928) General erchandie tore (2.439) (2.451) (1.107) Apparel and acceory tore (1.564) (1.382) (1.764) Furniture and hoe furnihing tore (0.700) (0.913) (1.030) Other Indutrie Micellaneou retailer (2.750) (3.776) (3.971) Food tore (2.319) (2.248) (2.545) Drug and propriety tore (0.776) (0.961) (0.921) Gaoline ervice tation (1.498) (2.131) (2.150) Note: Data are taken fro the Cenu of Retail Trade. Weekly Eployent eaure the nuber of paid eployee in the week including March 12. Annual Revenue i in 1985 dollar. The indutrie lited are the ot diaggregate inforation available fro the Econoic Cenu and i baed on SIC indutry code. Percentage are calculated after pooling year 1977, 1982, 1987 and The tandard error reflect the variation in indutry copoition acro tate. 34

36 Table 7 Percentage Difference in Mean Fraction of Deregulating Indutrie between State with and without Sunday Cloing Law by Year, Weekly Eployent Annual Revenue Nuber of Shop (0.025) (0.043) (0.025) (0.021) (0.029) (0.021) (0.023) (0.034) (0.019) (0.025) (0.030) (0.022) Note: Data are taken fro the Cenu of Retail Trade, The nuber in bracket are tandard error. For the grouping of tate into thoe with and without Sunday Cloing Law, ee Appendice A and B. 35

37 Table 8 The Tiing of Deregulation and Cenu Sapling, Deregulated by 1980 Pennylvania Connecticut New Jerey X X X Deregulated by 1983 Veront X Maachuett X Deregulated by 1987 Miiippi X Texa Louiiana X X Note: Reference to exact date of deregulation are found in Appendix B. 36

38 Table 9 The Ipact of Deregulation uing all Indutrie and all State, Change in Log(Dependent Variable) Weekly Eployent Annual Revenue Nuber of Shop (1) (2) (3) (4) (5) (6) (7) (8) (9) Duy for deregulating indutrie (0.039) (0.017) (0.020) (0.051) (0.042) (0.045) (0.014) (0.013) (0.019) State duie State pecific control and region duie Duy for deregulating indutrie (0.023) (0.042) (0.038) (0.032) (0.027) (0.028) (0.015) (0.020) (0.018) State duie State pecific control and region duie Duy for deregulating indutrie (0.019) (0.027) (0.032) (0.021) (0.021) (0.015) (0.013) (0.022) (0.019) State duie State pecific control and region duie Period Period Period Note: Data are taken fro the Cenu of Retail Trade The firt pecification only include duie for indutry a additional control. The econd pecification include indutry and tate duie. The final pecification include indutry duie, growth in tate wide uneployent, population and peronal dipoable incoe and 5 region duie. Standard error are clutered by whether the indutry belong to the group of deregulating indutrie or not interacted with tate cell. The nuber of obervation i between 389 and

39 Table 10 The Ipact of Deregulation on Deregulating Indutrie uing all State, Change in Log (Dependent Variable) Weekly Eployent Annual Revenue Nuber of Shop Period Return to deregulation (0.021) (0.046) (0.019) Period Return to deregulation (0.038) (0.028) (0.018) Period Return to deregulation (0.032) (0.015) (0.019) Note: Data are taken fro the Cenu of Retail Trade All regreion include change in the log of the tate wide uneployent rate, population and peronal dipoable incoe, 5 region duie and indutry duie. Standard error are clutered by tate. The nuber of obervation i between 197 and

40 Table 11 The Ipact of Deregulation on Annual Revenue in each Deregulating Indutry uing all State by Period, Period Building aterial and garden tore (0.094) (0.114) (0.088) General erchandie tore (0.063) (0.046) (0.087) Apparel and acceory tore (0.041) (0.068) (0.058) Furniture and hoe furnihing tore (0.071) (0.089) (0.057) Note: Data are taken fro the Cenu of Retail Trade All regreion include change in the log of the tate wide uneployent rate, population and peronal dipoable incoe and 5 region duie. The nuber of obervation i between 48 and

41 Table 12 The Ipact of Deregulation on Average Weekly Wage in Deregulating Indutrie uing all State, Change in Log (Dependent Variable) Weekly Eployent Annual Payroll Period Return to deregulation (0.021) (0.033) Period Return to deregulation (0.038) (0.046) Period Return to deregulation (0.032) (0.032) Note: Data are taken fro the Cenu of Retail Trade All regreion include the change in the log of tate wide uneployent, population and peronal dipoable incoe, 5 region duie and indutry duie. Standard error are clutered by tate. The nuber of obervation i between 198 and

42 Figure 1 The US Hitory of General Sunday Cloing Law,