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Right-to-Work Laws and the Extent of Unionization

Listed author(s):
  • Henry S. Farber
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    It is a well known fact that the extent of unionization is lower in states with Right-to-Work (RTW) laws. A framework is developed for determining whether RTW laws actually cause a decrease in the extent of unionization or whether they simply mirror preexisting tastes of workers against unions. A set of empirical tests is proposed that can distinguish between these explanations based on differences between RTW and non-RTW states in the demand for union representation, the supply of union jobs relative to that demand, and the observed union-nonunion wage differential. Data from the Quality of Employment Survey and from the Current Population Survey are utilized to implement the tests.The results indicate that the demand for union representation is significantly lower in states with RTW laws.At the same time no significant difference is found on the basis of RTW laws in the supply of union jobs relative to demand. It is also found that the observed union-nonunion wage differential is slightly larger in RTW states.This pattern is consistent with the hypothesis that RTW laws simply mirror preexisting preferences against union representation. In its entirety it is not consistent with the hypothesis that RTW laws cause a decrease in the extent of unionization.A final interesting result is that it is found that the extent of unionization in the south is lower even after controlling for the presence of RTW laws in many of the states in that region. Further, it is determined that this is due to a supply of union jobs in the south that is more constrained relative to demand than elsewhere. This suggests that there exist a set of institutional or economic factors in the souththat makes union organizing more difficult and expensive independent of the existence of RTW laws.

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    Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 1136.

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    Date of creation: Jun 1983
    Publication status: published as Farber, Henry S. "Right-to-Work Laws and the Extent of Unionization." Journal of Labor Economics, Vol. 2, No. 3, (July 1984), pp. 319-352.
    Handle: RePEc:nbr:nberwo:1136
    Note: LS
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    1. Warren, Ronald S, Jr & Strauss, Robert P, 1979. "A Mixed Logit Model of the Relationship between Unionization and Right-to-Work Legislation: Comment," Journal of Political Economy, University of Chicago Press, vol. 87(3), pages 648-655, June.
    2. Richard B. Freeman, 1980. "Unionism and the Dispersion of Wages," ILR Review, Cornell University, ILR School, vol. 34(1), pages 3-23, October.
    3. Farber, Henry S & Saks, Daniel H, 1980. "Why Workers Want Unions: The Role of Relative Wages and Job Characteristics," Journal of Political Economy, University of Chicago Press, vol. 88(2), pages 349-369, April.
    4. Farrell E. Bloch & Mark S. Kuskin, 1978. "Unions and Wages: Wage Determination in the Union and Nonunion Sectors," ILR Review, Cornell University, ILR School, vol. 31(2), pages 183-192, January.
    5. John M. Abowd & Henry S. Farber, 1982. "Job Queues and the Union Status of Workers," ILR Review, Cornell University, ILR School, vol. 35(3), pages 354-367, April.
    6. Ethel B. Jones, 1982. "Union/Nonunion Differentials: Membership or Coverage?," Journal of Human Resources, University of Wisconsin Press, vol. 17(2), pages 276-285.
    7. H. S. Farber, 1982. "The Demand for Union Representation," Working papers 295, Massachusetts Institute of Technology (MIT), Department of Economics.
    8. Richard B. Freeman & James L. Medoff, 1979. "New Estimates of Private Sector Unionism in the United States," ILR Review, Cornell University, ILR School, vol. 32(2), pages 143-174, January.
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