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How Right-To-Work Laws Affect Wages




I examine the wage effects of Right-To-Work (RTW). Using state-level data, I estimate that, ceteris paribus, RTW states have average wages that are significantly higher than non-RTW states. This result is robust is across a wide variety of specifications. An important distinctive of this study is that it controls for state economic conditions at the time states adopted RTW. States that adopted RTW were generally poorer than other states. Failure to control for these initial conditions may be the reason that previous studies have not identified a positive wage impact for RTW.

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  • W. Robert Reed, 2003. "How Right-To-Work Laws Affect Wages," Journal of Labor Research, Transaction Publishers, vol. 24(4), pages 713-730, October.
  • Handle: RePEc:tra:jlabre:v:24:y:2003:i:4:p:713-730

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    References listed on IDEAS

    1. William J. Moore & Robert J. Newman, 1985. "The Effects of Right-to-Work Laws: A Review of the Literature," ILR Review, Cornell University, ILR School, vol. 38(4), pages 571-585, July.
    2. Henry S. Farber, 1983. "Right-to-Work Laws and the Extent of Unionization," NBER Working Papers 1136, National Bureau of Economic Research, Inc.
    3. Farber, Henry S, 1984. "Right-to-Work Laws and the Extent of Unionization," Journal of Labor Economics, University of Chicago Press, vol. 2(3), pages 319-352, July.
    4. David Neumark & Michael L. Wachter, 1995. "Union Effects on Nonunion Wages: Evidence from Panel Data on Industries and Cities," ILR Review, Cornell University, ILR School, vol. 49(1), pages 20-38, October.
    5. 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.
    6. Robert Tannenwald, 1997. "State regulatory policy and economic development," New England Economic Review, Federal Reserve Bank of Boston, issue Mar, pages 83-108.
    7. Moulton, Brent R, 1990. "An Illustration of a Pitfall in Estimating the Effects of Aggregate Variables on Micro Unit," The Review of Economics and Statistics, MIT Press, vol. 72(2), pages 334-338, May.
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    Cited by:

    1. Michael J. Hicks & Michael LaFaive & Srikant Devaraj, 2016. "New Evidence on the Effect of Right-to-Work Laws on Productivity and Population Growth," Cato Journal, Cato Journal, Cato Institute, vol. 36(1), pages 101-120, Winter.
    2. Stevans, Lonnie, 2007. "The Effect of Right-to-Work Laws on Business and Economic Conditions: A Multivariate Approach," MPRA Paper 5638, University Library of Munich, Germany.
    3. Mark Skidmore & William Dyar, 2015. "Diminishing Health, Rising Health Care Costs and Long-run Growth in Local Government Spending," CESifo Working Paper Series 5646, CESifo Group Munich.

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