What Do Right-to-Work Laws Do? Evidence from a Synthetic Control Method Analysis

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Article first published online: July 15, 2015

Ozkan Eren, Assistant Professor of Economics, Louisiana State University and Serkan Ozbeklik, Associate Professor of Economics, Claremont McKenna College

What was the genesis of the idea for your research/paper?

Recent enactments of right-to-work (RTW) laws in Indiana, Michigan and Wisconsin have rekindled the debate over the role of RTW laws on state economies and labor organizations. Opponents of the laws assert that RTW laws lead to lower wages, lower safety and health standards that protect workers on the job, and cause workers to receive union representation without incurring the cost. In his December 2012 address to union workers in Michigan, President Obama stated: "....these so-called right-to-work laws, they don't have to do with economics, they have everything to do with politics". Advocates contend that these laws create jobs, lead to higher wages, improve union accountability and are morally right because they do not compel individuals to support a cause in which they do not believe.

Our interest were mainly driven by the lack of consensus on this important policy relevant topic. We believed that providing credible evidence on RTW laws and their potential effects were crucial for states considering similar enactments in the future.

What is the main conclusion that becomes evident from your research? (Or, what is your main takeaway?)

We find that the passage of RTW laws in Oklahoma significantly decreased private sector unionization rates. Other state outcomes such as total employment rate, average private sector wages, however, were not affected from RTW laws, at least in the short-run

What are some of the more interesting or surprising findings/conclusions did you find in the process of bringing this together?

RTW laws haves been a long debated topic with no clear consensus on their effects on state economies. Despite any scientific evidence on their role on state economies, RTW laws have attracted significant attention from the popular media and politicians for a long time. The common perception is that these laws are conducive to business creation, growth of the economy and welfare of the society. We were surprised by our findings of no pronounced effect of RTW laws on state economies.

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Authors' Bio


Eren

Ozkan Eren is an Assistant Professor of Economics at the Louisiana State University. He is the editor of the Journal of Labor Research. His current research focuses on the use of quasi-experimental and experimental methods to explore the effects of education and public policies on short- and long-run academic performance, as well as on crime and labor market outcomes.

His research interests are in the areas of economics of education, economics of crime, labor market interactions and quantitative techniques involving treatment and distributional effects, nonparametric econometrics and experimental data modelling.


Ozbeklik
Serkan Ozbeklik is an Associate Professor of Economics at Claremont McKenna College. His research interests are in the areas of economics of education, labor economics and applied econometrics with a focus on distributional analysis of public policies. Professor Ozbeklik’s recent research has been on the effects of remedial education policies, peers and teacher quality in K through 12 on students’ academic and behavioral outcomes.

 

 

 
 
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