The Impact of Right-to-Work Laws on Worker Wages: Evidence from Collective Bargaining Agreements
70 Pages Posted: 20 Dec 2017 Last revised: 1 Oct 2018
Date Written: December 15, 2017
We analyze the impact of staggered introduction of right-to-work (RTW) laws across various states in the US on worker wages. After the introduction of RTW laws, there is a decrease in wages negotiated through collective bargaining agreements (CBAs) in the affected states. Further, the number of CBAs decreases, and the gap between the fraction of workers covered by a CBA and the fraction of union members increases. Firms increase investment and employment, and reduce their financial leverage. Our results are consistent with the view that RTW laws decrease the bargaining power of unions, which reduces unions' ability to negotiate higher wages.
Keywords: Right to Work, Collective Bargaining, Unions, Wage Growth, Workers
JEL Classification: J31, J41, J50, G30
Suggested Citation: Suggested Citation