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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
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