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How Right-To-Work Laws Affect Wages

  • W. ROBERT REED

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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Article provided by Transaction Publishers in its journal Journal of Labor Research.

Volume (Year): 24 (2003)
Issue (Month): 4 (October)
Pages: 713-730

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Handle: RePEc:tra:jlabre:v:24:y:2003:i:4:p:713-730
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  1. William J. Moore & Robert J. Newman, 1985. "The effects of right-to-work laws: A review of the literature," Industrial and Labor Relations Review, 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. 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 334-38, May.
  4. 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.
  5. 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 319-52, July.
  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. David Neumark & Michael L. Wachter, 1995. "Union effects on nonunion wages: Evidence from panel data on industries and cities," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 49(1), pages 20-38, October.
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