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

See all articles by Sudheer Chava

Sudheer Chava

Georgia Institute of Technology - Scheller College of Business

Andras Danis

Georgia Institute of Technology - Scheller College of Business

Alex Hsu

Georgia Institute of Technology - Scheller College of Business

Date Written: December 15, 2017

Abstract

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

Chava, Sudheer and Danis, Andras and Hsu, Alex, The Impact of Right-to-Work Laws on Worker Wages: Evidence from Collective Bargaining Agreements (December 15, 2017). Georgia Tech Scheller College of Business Research Paper No. 18-1. Available at SSRN: https://ssrn.com/abstract=3088612 or http://dx.doi.org/10.2139/ssrn.3088612

Sudheer Chava

Georgia Institute of Technology - Scheller College of Business ( email )

800 West Peachtree St.
Atlanta, GA 30308
United States

HOME PAGE: http://www.prism.gatech.edu/~schava6/

Andras Danis

Georgia Institute of Technology - Scheller College of Business ( email )

800 West Peachtree St.
Atlanta, GA 30308
United States

HOME PAGE: http://scheller.gatech.edu/danis

Alex Hsu (Contact Author)

Georgia Institute of Technology - Scheller College of Business ( email )

800 West Peachtree St.
Atlanta, GA 30308
United States
4043851123 (Phone)

Register to save articles to
your library

Register

Paper statistics

Downloads
213
rank
137,991
Abstract Views
1,074
PlumX Metrics