Stevans, Lonnie (2007): The Effect of Right-to-Work Laws on Business and Economic Conditions: A Multivariate Approach.
Download (138Kb) | Preview
The 1947 Taft-Hartley amendments to the National Labor Relations Act (1935) authorized a state's right to prohibit unions from requiring a worker to pay dues, even when the worker is covered by a collective bargaining agreement. Within a short time of the amendment's passage, twelve (12) states passed "right-to-work" laws, as did ten (10) more states in the intervening years. Although there has been considerable research on the influence of right-to-work laws on union density, organizing efforts, industrial development and some study of wage differences, there has been no examination of the legislations’ effect on business and economic conditions across states. In this paper, the average differences in business conditions, personal income, and employment across states that have enacted right-to-work laws versus those that do not have this legislation are examined using a Multivariate Analysis of Variance (MANOVA). Our most notable result is the finding that although right-to-work states may be more attractive to business, this does not necessarily translate into enhanced economic viability for all sectors in the right-to-work state. Not only are personal income and employment lower, but there are no significant differences in the number of firms and business formations between right-to-work and non-right-to-work states.
|Item Type:||MPRA Paper|
|Original Title:||The Effect of Right-to-Work Laws on Business and Economic Conditions: A Multivariate Approach|
|Keywords:||right-to-work laws; business formation; employment; Multivariate Analysis of Variance (MANOVA)|
|Subjects:||J - Labor and Demographic Economics > J5 - Labor-Management Relations, Trade Unions, and Collective Bargaining > J51 - Trade Unions: Objectives, Structure, and Effects
C - Mathematical and Quantitative Methods > C3 - Multiple or Simultaneous Equation Models; Multiple Variables > C30 - General
C - Mathematical and Quantitative Methods > C5 - Econometric Modeling > C50 - General
K - Law and Economics > K3 - Other Substantive Areas of Law > K31 - Labor Law
J - Labor and Demographic Economics > J5 - Labor-Management Relations, Trade Unions, and Collective Bargaining > J58 - Public Policy
|Depositing User:||Lonnie Stevans|
|Date Deposited:||06. Nov 2007|
|Last Modified:||12. Feb 2013 18:23|
Blanchflower, D. G., Self-Employment: More May Not Be Better, Swedish Economic Policy Review, Vol. 11, 2004, pp. 15-73.
Dumond, J.M., B.T. Hirsch, and D.A. MacPherson, Wage Differentials Across Labor Markets and Workers: Does Cost of Living Matter? Economic Inquiry, Vol. 37, No. 4, 1999, pp. 577-98.
Halvorsen, R. and Palmquist, P., The Interpretation of Dummy Variables in Semilogarithmic Equations. American Economic Review, Vol. 70, 1980, pp. 474-475.
Farber, H.S., Nonunion Wage Rates and the Threat of Unionization. Industrial and Labor Relations Review, Vol. 58, No. 3, April 2005, pp. 335-352.
Kennedy, P., Estimation with Correctly Interpreted Dummy Variables in Semilogarithmic Equations. American Economic Review, Vol. 71, 1981, p. 801.
Mishel, L., The Wage Penalty of Right-to-Work Laws. Economic Policy Institute, http://www.epinet.org/content.cfm/datazone_rtw_index, August 2001.
Moore, W.J., The Determinants and Effects of Right-To-Work Laws: A Review of the Recent Literature. Journal of Labor Research, Vol. 19, No. 3, 1998, pp. 449-69.
Moore, W. J., and R.J. Newman, The Effects of Right-to-Work Laws: A Review of the Literature. Industrial and Labor Relations Review, Vol. 38, No. 4, 1985, pp. 571-85.
Reed, W.R., How Right to Work Laws Affect Wages. Journal of Labor Research, Vol. 24, No. 4, Fall 2003, pp. 713-730.