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Title: The Long-Run Effects of Right to Work Laws
Citation Type: Miscellaneous
Publication Year: 2021
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Abstract: In recent decades, states with Right-To-Work (RTW) laws have experienced higher employment and population growth than states without such laws. We investigate the extent to which these patterns, and other related labor market phenomena, are causally explained by these laws and closely related policies. Using border-pair differences, we find RTW laws are associated with a 3.2 percentage point increase in the manufacturing share of employment. This increase in manufacturing does not merely crowd out other economic activity; we find that people who live in RTW regions have 1.6 percentage points higher employment, 1.4 percentage points higher labor force participation, and 0.34 percentage points lower disability receipt than residents of similar non-RTW areas. However, wages and labor compensation do not appear to be lower on average. In turn, these differences appear to influence both individual residence and workplace location choice. Since their passage, locations with RTW laws have seen higher population growth, and on net attract commuters from non-RTW locations. These labor market effects also spill over into socioeconomic outcomes; RTW laws are also associated with lower childhood poverty rates and greater upward mobility. In particular, children at the 25th percentile of the parental income distribution during childhood have a 1.7 percentage point higher probability of reaching the top income quintile during adulthood if they grew up in a RTW location. These differences in outcomes were not present prior to the passage of RTW laws, persist after controlling for other major policy differences between states, and do not appear primarily attributable to local substitution. Together, this provides evidence that these patterns are substantially caused by RTW laws. * Harvard University: matthewlilley@g.harvard.edu. We are grateful for comments and suggestions from
Url: https://scholar.harvard.edu/files/matthew-lilley/files/long-run-effects-right-to-work.pdf
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Authors: Austin, Benjamin; Lilley, Matthew
Publisher: Harvard University
Data Collections: IPUMS USA - Ancestry Full Count Data, IPUMS NHGIS
Topics: Crime and Deviance, Labor Force and Occupational Structure
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