IDEAS home Printed from https://ideas.repec.org/a/bpj/bejeap/v21y2021i1p45-81n2.html
   My bibliography  Save this article

Did Right-To-Work Laws Impact Income Inequality? Evidence from U.S. States Using the Synthetic Control Method

Author

Listed:
  • Jordan Jeffrey

    (Professor, Agricultural and Applied Economics, University of Georgia, 206 Stuckey Building, 1109 Experiment Street, Griffin, GA, 30223, USA)

  • Mathur Aparna

    (Resident Scholar, American Enterprise Institute, 1789 Massachusetts Avenue, Washington, DC, 20036, USA)

  • Munasib Abdul

    (Economist, Research and Methodology Group (RMG), International Directorate, Bureau of Economic Analysis, U.S. Department of Commerce, 4600 Silver Hill Road, Suitland, MD, 20746, USA)

  • Roy Devesh

    (Senior Research Fellow, Agriculture for Nutrition and Health (A4NH), International Food Policy Research Institute (IFPRI), 1301 I Street NW, Washington, DC, USA)

Abstract

In this paper, we use the Synthetic Control Method (SCM) to examine the impact of a state’s adoption of a Right-To-Work (RTW) law on income inequality. We explore possible pathways through which RTW laws may impact inequality, namely, unionization, investment, and wages. Our finding of a lack of impact of RTW laws on inequality is further supported by findings of a lack of impact of the law on these variables. Our results follow Farber (1984), who suggests that RTW laws may simply mirror pre-existing preferences against union representation. Hence RTW laws are not the primary driver of changes in inequality.

Suggested Citation

  • Jordan Jeffrey & Mathur Aparna & Munasib Abdul & Roy Devesh, 2021. "Did Right-To-Work Laws Impact Income Inequality? Evidence from U.S. States Using the Synthetic Control Method," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 21(1), pages 45-81, January.
    • Handle: RePEc:bpj:bejeap:v:21:y:2021:i:1:p:45-81:n:2
    DOI: 10.1515/bejeap-2019-0299
    as

    Download full text from publisher

    File URL: https://doi.org/10.1515/bejeap-2019-0299
    Download Restriction: For access to full text, subscription to the journal or payment for the individual article is required.
    File URL: https://libkey.io/10.1515/bejeap-2019-0299?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Munasib, Abdul & Rickman, Dan S., 2015. "Regional economic impacts of the shale gas and tight oil boom: A synthetic control analysis," Regional Science and Urban Economics, Elsevier, vol. 50(C), pages 1-17.
    2. W. Robert Reed, 2003. "How Right-To-Work Laws Affect Wages," Journal of Labor Research, Transaction Publishers, vol. 24(4), pages 713-730, October.
    3. Sarah Bohn & Magnus Lofstrom & Steven Raphael, 2014. "Did the 2007 Legal Arizona Workers Act Reduce the State's Unauthorized Immigrant Population?," The Review of Economics and Statistics, MIT Press, vol. 96(2), pages 258-269, May.
    4. Robert J. Gordon & Ian Dew-Becker, 2008. "Controversies about the Rise of American Inequality: A Survey," NBER Working Papers 13982, National Bureau of Economic Research, Inc.
    5. Thomas Piketty & Emmanuel Saez & Stefanie Stantcheva, 2014. "Optimal Taxation of Top Labor Incomes: A Tale of Three Elasticities," American Economic Journal: Economic Policy, American Economic Association, vol. 6(1), pages 230-271, February.
    6. Karen Maguire & Abdul Munasib, 2016. "The Disparate Influence of State Renewable Portfolio Standards on Renewable Electricity Generation Capacity," Land Economics, University of Wisconsin Press, vol. 92(3), pages 468-490.
    7. repec:hal:pseose:halshs-00944873 is not listed on IDEAS
    8. repec:hal:pseose:halshs-00847231 is not listed on IDEAS
    9. Marianne Bertrand & Esther Duflo & Sendhil Mullainathan, 2004. "How Much Should We Trust Differences-In-Differences Estimates?," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 119(1), pages 249-275.
    10. Abadie, Alberto & Diamond, Alexis & Hainmueller, Jens, 2010. "Synthetic Control Methods for Comparative Case Studies: Estimating the Effect of California’s Tobacco Control Program," Journal of the American Statistical Association, American Statistical Association, vol. 105(490), pages 493-505.
    11. Ian Dew-Becker & Robert J. Gordon, 2005. "Where Did Productivity Growth Go? Inflation Dynamics and the Distribution of Income," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 36(2), pages 67-150.
    12. David Card, 1992. "The Effect of Unions on the Distribution of Wages: Redistribution or Relabelling?," NBER Working Papers 4195, National Bureau of Economic Research, Inc.
    13. Claudia Goldin & Lawrence F. Katz, 2007. "Long-Run Changes in the Wage Structure: Narrowing, Widening, Polarizing," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 38(2), pages 135-168.
    14. Bruce D. Meyer & James X. Sullivan, 2012. "Winning the War: Poverty from the Great Society to the Great Recession," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 43(2 (Fall)), pages 133-200.
    15. Thomas J. Holmes, 1998. "The Effect of State Policies on the Location of Manufacturing: Evidence from State Borders," Journal of Political Economy, University of Chicago Press, vol. 106(4), pages 667-705, August.
    16. Ellwood, David T & Fine, Glenn, 1987. "The Impact of Right-to-Work Laws on Union Organizing," Journal of Political Economy, University of Chicago Press, vol. 95(2), pages 250-273, April.
    17. Ms. Florence Jaumotte & Ms. Carolina Osorio-Buitron, 2015. "Inequality and Labor Market Institutions," IMF Staff Discussion Notes 2015/014, International Monetary Fund.
    18. Thomas C. Buchmueller & John DiNardo & Robert G. Valletta, 2011. "The Effect of an Employer Health Insurance Mandate on Health Insurance Coverage and the Demand for Labor: Evidence from Hawaii," American Economic Journal: Economic Policy, American Economic Association, vol. 3(4), pages 25-51, November.
    19. Lumsden, Keith G & Petersen, Craig H, 1975. "The Effect of Right-to-Work Laws on Unionization in the United States," Journal of Political Economy, University of Chicago Press, vol. 83(6), pages 1237-1248, December.
    20. Mark W. Frank, 2009. "Inequality And Growth In The United States: Evidence From A New State‐Level Panel Of Income Inequality Measures," Economic Inquiry, Western Economic Association International, vol. 47(1), pages 55-68, January.
    21. Mideksa, Torben K., 2013. "The economic impact of natural resources," Journal of Environmental Economics and Management, Elsevier, vol. 65(2), pages 277-289.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Cecília Hornok & Dewa Gede Sidan Raeskyesa, 2024. "Economic zones and local income inequality: Evidence from Indonesia," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 22(1), pages 69-100, March.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Munasib, Abdul & Jordan, Jeffrey L. & Mathur, Aparna & Roy, Devesh, 2015. "Do Right to Work Laws Worsen Income Inequality? Evidence from the Last Five Decades," 2015 AAEA & WAEA Joint Annual Meeting, July 26-28, San Francisco, California 205341, Agricultural and Applied Economics Association.
    2. Ehrich, Malte & Munasib, Abdul & Roy, Devesh, 2018. "The Hartz reforms and the German labor force," European Journal of Political Economy, Elsevier, vol. 55(C), pages 284-300.
    3. Karen Maguire & Abdul Munasib, 2016. "The Disparate Influence of State Renewable Portfolio Standards on Renewable Electricity Generation Capacity," Land Economics, University of Wisconsin Press, vol. 92(3), pages 468-490.
    4. Karen Maguire & Abdul Munasib, 2018. "Electricity Price Increase in Texas: What is the Role of RPS?," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 69(2), pages 293-316, February.
    5. Bidisha Lahiri & Anurag Deb, 2022. "Impact of the Indian “demonetization” policy on its export performance," Empirical Economics, Springer, vol. 62(6), pages 2799-2825, June.
    6. Kyung-nok Chun, 2023. "What do Right-to-Work Laws do to Unions? Evidence from Six Recently-Enacted RTW Laws," Journal of Labor Research, Springer, vol. 44(1), pages 94-144, June.
    7. Bruno Ferman & Cristine Pinto & Vitor Possebom, 2020. "Cherry Picking with Synthetic Controls," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 39(2), pages 510-532, March.
    8. Sandra Achten & Lars Beyer & Antje-Mareike Dietrich & Dennis Ebeling & Christian Lessmann & Arne Steinkraus, 2019. "Large scale infrastructure investment and economic performance – a case study of Oresund," Applied Economics Letters, Taylor & Francis Journals, vol. 26(1), pages 21-26, January.
    9. Giulio Grossi & Marco Mariani & Alessandra Mattei & Patrizia Lattarulo & Ozge Oner, 2020. "Direct and spillover effects of a new tramway line on the commercial vitality of peripheral streets. A synthetic-control approach," Papers 2004.05027, arXiv.org, revised Nov 2023.
    10. Reimer, Matthew N. & Haynie, Alan C., 2018. "Mechanisms matter for evaluating the economic impacts of marine reserves," Journal of Environmental Economics and Management, Elsevier, vol. 88(C), pages 427-446.
    11. Munasib, Abdul & Rickman, Dan S., 2015. "Regional economic impacts of the shale gas and tight oil boom: A synthetic control analysis," Regional Science and Urban Economics, Elsevier, vol. 50(C), pages 1-17.
    12. Karen Maguire & Abdul Munasib, 2015. "The Disparate Influence of State Renewable Portfolio Standards (RPS) on U.S. Renewable Electricity Generation Capacity," Economics Working Paper Series 1502, Oklahoma State University, Department of Economics and Legal Studies in Business, revised Feb 2015.
    13. Tianyuan Luo & Genti Kostandini, 2022. "Stringent immigration enforcement and responses of the immigrant‐intensive sector: Evidence from E‐Verify adoption in Arizona," American Journal of Agricultural Economics, John Wiley & Sons, vol. 104(4), pages 1411-1434, August.
    14. Myoung-jae Lee & Yasuyuki Sawada, 2020. "Review on Difference in Differences," Korean Economic Review, Korean Economic Association, vol. 36, pages 135-173.
    15. Bibek Adhikari & Romain Duval & Bingjie Hu & Prakash Loungani, 2018. "Can Reform Waves Turn the Tide? Some Case Studies using the Synthetic Control Method," Open Economies Review, Springer, vol. 29(4), pages 879-910, September.
    16. Tomasi, Silvia, 2022. "The (Non) impact of the Spanish “Tax on the Sun” on photovoltaics prosumers uptake," Energy Policy, Elsevier, vol. 168(C).
    17. Enrico Moretti, 2013. "Real Wage Inequality," American Economic Journal: Applied Economics, American Economic Association, vol. 5(1), pages 65-103, January.
    18. Nguyen, Justin Hung & Qiu, Buhui, 2022. "Right-to-Work laws and corporate innovation," Journal of Corporate Finance, Elsevier, vol. 76(C).
    19. Dillender, Marcus O. & Heinrich, Carolyn J. & Houseman, Susan N., 2016. "Health insurance reform and part-time work: Evidence from Massachusetts," Labour Economics, Elsevier, vol. 43(C), pages 151-158.
    20. Jacob Bundrick & Weici Yuan, 2019. "Do Targeted Business Subsidies Improve Income and Reduce Poverty? A Synthetic Control Approach," Economic Development Quarterly, , vol. 33(4), pages 351-375, November.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bpj:bejeap:v:21:y:2021:i:1:p:45-81:n:2. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Peter Golla (email available below). General contact details of provider: https://www.degruyter.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.