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Right-to-work Laws and Manufacturing Employment: The Importance of Spatial Dependence

Author

Listed:
  • Charlene M. Kalenkoski

    () (Department of Economics, Ohio University)

  • Donald J. Lacombe

    () (Department of Economics, Ohio University)

Abstract

Using 2000 decennial census data, we estimate the relationships between right-to-work (RTW) laws and employment in manufacturing and other industries. Estimates that do not account for geographically correlated omitted factors dramatically overstate the positive relationship between RTW legislation and manufacturing employment. We estimate that RTW legislation is associated with an increase in manufacturing's share of private wage and salary employment of 2.12%, an estimate almost 30% lower than the estimate that does not control for these spatially correlated omitted factors. Results for other industries indicate that RTW legislation is negatively associated with employment shares in the agriculture, forestry, fishing and hunting, and mining industries and some service industries, but is positively associated with employment shares in the information and professional, scientific, management, administrative, and waste management services industries. Improperly controlling for geographic factors can lead to incorrect inferences and misinform policy.

Suggested Citation

  • Charlene M. Kalenkoski & Donald J. Lacombe, 2006. "Right-to-work Laws and Manufacturing Employment: The Importance of Spatial Dependence," Southern Economic Journal, Southern Economic Association, vol. 73(2), pages 402-418, October.
  • Handle: RePEc:sej:ancoec:v:73:2:y:2006:p:402-418
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    Cited by:

    1. Margarita Billon & Roberto Ezcurra & Fernando Lera-Lãpez, 2009. "Spatial Effects in Website Adoption by Firms in European Regions," Growth and Change, Wiley Blackwell, vol. 40(1), pages 54-84.
    2. Han, Xiaoyi & Lee, Lung-fei, 2013. "Bayesian estimation and model selection for spatial Durbin error model with finite distributed lags," Regional Science and Urban Economics, Elsevier, vol. 43(5), pages 816-837.
    3. Ozkan Eren & I. Serkan Ozbeklik, 2011. "Right-to-Work Laws and State-Level Economic Outcomes: Evidence from the Case Studies of Idaho and Oklahoma Using Synthetic Control Method," Working Papers 1101 Classification-JEL J, University of Nevada, Las Vegas , Department of Economics.
    4. Cebula, Richard, 2007. "Impact of Property Taxes and Public Education Outlays on Housing Costs: Recent Empirical Evidence," MPRA Paper 60109, University Library of Munich, Germany.
    5. Charlene Kalenkoski & Donald Lacombe, 2008. "Effects of Minimum Wages on Youth Employment: the Importance of Accounting for Spatial Correlation," Journal of Labor Research, Springer, vol. 29(4), pages 303-317, December.

    More about this item

    JEL classification:

    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
    • J58 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Public Policy

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