Right to Work Laws: New Evidence from the Stock Market

Posted: 14 Aug 2000

See all articles by Steven E. Abraham

Steven E. Abraham

State University of New York at Oswego - School of Business

Paula B. Voos

Rutgers, The State University of New Jersey - Labor Program

Abstract

This article is an empirical examination of whether or not stockholder wealth rose in response to passage of right-to-work laws - state laws banning union shop clauses from collective bargaining agreements. Stockholder wealth rose when Louisiana passed such a law in 1976 and when Idaho did so in 1985-86 (for corporations located in the relevant state). Presumably this occurred because investors anticipated higher future profits with weaker labor unions and/or a lower probability of future organization. This is new evidence that such laws are more than symbolic: they hamper labor unions.

JEL Classification: J5, K3

Suggested Citation

Abraham, Steven E. and Voos, Paula B., Right to Work Laws: New Evidence from the Stock Market. Available at SSRN: https://ssrn.com/abstract=234162

Steven E. Abraham (Contact Author)

State University of New York at Oswego - School of Business ( email )

316 Rich Hall
Oswego, NY 13126
United States
315-312-3307 (Phone)

HOME PAGE: http://www.oswego.edu/~abraham/

Paula B. Voos

Rutgers, The State University of New Jersey - Labor Program ( email )

50 Labor Center Way
New Brunswick, NJ 08901
United States
732-932-1748 (Phone)
732-932-8677 (Fax)

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