Association for Public Policy Analysis & Management

            This research focuses on whether state-level “Right-to-Work” (RTW) laws improve or worsen job opportunities for workers. The paper utilizes microdata, along with the recent policy adoptions of RTW laws in Indiana, Michigan and Wisconsin to assess the impact of RTW laws on labor outcomes.  This research hopes to expand the literature of RTW laws, which has mainly focused on aggregate, state-level outcomes.

Why Study the Issue

The impact of RTW laws is controversial, with proponents arguing that these laws benefit workers and opponents arguing that they harm workers.  RTW laws are laws that eliminate union security agreements that require workers in a bargaining unit to join a union or pay an agency fee for collective bargaining benefits. The empirical literature is mixed, but stronger research designs show that RTW laws reduce union organizing and unionization (Moore, 1998).

Proponents for RTW laws argue that RTW laws help workers, since these laws improve employment growth and labor market flexibility.  They argue that unions may increase inefficiencies by restricting hiring practices and work practices through work rules.  Opponents of RTW laws have argued that RTW laws have adverse effects on worker wages and employment.  They argue that union security agreements are an important source of union strength in collective bargaining against powerful employers.  RTW laws would reduce the benefits of unions that protect jobs and wages of workers (Carroll, 1983).

Research Questions

This research focuses on the impact of RTW laws on the short-run outcomes.  Do RTW laws increase or decrease the likelihood that a worker will be a union member?  Do RTW laws increase or decrease the likelihood that a worker will be employed?  Do RTW laws increase or decrease the likelihood that a worker will be unemployed?  Do RTW laws increase or decrease wages for those who are employed? 

Methods and Data

The research design focuses on private sector individuals in Midwestern states to assess the impact of RTW laws on wage and employment outcomes.  The focus on policy adoptions in the Indiana, Michigan, and Wisconsin using a difference-in-difference research design hopes to reduce unobserved heterogeneity for a valid assessment of RTW laws.  The treatment group is individuals in these states before and after their respective RTW laws are implemented, while the control group is individuals in contiguous union-shop states. 

The assessment of the research questions utilizes panel data.  The Current Population Survey provides vital microdata on union status, employment status, wages, and other characteristics.  It also can be transformed into year-to-year panels to assess outcomes before and after the law (Schumacher, 1999).  Microdata are important, since they help control endogeneity and time-invariant unobserved heterogeneity (Moore, 1998). 

Preliminary Results

The results find that RTW laws do have an impact on individual outcomes in the Midwest.  RTW laws are associated with a 1.4 to 2.2-percentage points reduction in the likelihood of being a union member.  Also, RTW laws are associated with a 2% to 4% reduction in earnings.  However, RTW laws are found to have mixed results on employment outcomes.