Abstract
This study derives an empirical model which simultaneously traces the effect of Right-to-Work laws on the worker’s decision to join the union, the union’s decision to set the wage rate, and the firm’s decision to employ inputs. The model identifies two channels through which Right-to-Work laws affect these decisions: the wage effect and the productivity effect. Our results show that RTW laws tend to affect economic decisions through the wage effect, because the effect of RTW laws on productivity is small in most states.
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We thank an anonymous referee for helpful comments. Any errors that remain are the responsibility of the authors.
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Garofalo, G.A., Malhotra, D.M. An integrated model of the economic effects of right-to-work laws. Journal of Labor Research 13, 293–305 (1992). https://doi.org/10.1007/BF02685487
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DOI: https://doi.org/10.1007/BF02685487