We found that counties in states with right-to-work laws had higher employment levels in several industries as a percentage of total private employment in 2018. Furthermore, we found that differences in employment opportunities were starkest among border counties. That is, counties in non-right-to-work states that bordered right-to-work states often had substantially lower employment levels than their nearby counties over the border in right-to-work states. This implies that border counties in states without right-to-work laws lose jobs to their neighbors, though this may not be the only reason for right-to-work states’ superior employment growth.
All employment figures below are measured for 2018. Some of these results met the conventional thresholds used to identify statistical significance while others did not. The economic effects were nevertheless often large and worth discussing. Graphic 1 provides more detailed information about the results.
- Manufacturing employment as a percentage of total employment increased as a result of right-to-work laws. Border counties in right-to-work states had 12.1% higher employment share in pre-2000 right-to-work states and 20.7% higher in post-2000 right-to-work states. In interior counties, the results were even larger: 15.5% higher employment share in pre-2000 states and 31.5% higher in post-2000 states.
- Right-to-work also increased manufacturing industry employment as a percentage of total employment in border counties without this policy. Counties in non-right-to-work states that bordered right-to-work states had a 3.4% and 10.8% higher employment share, respectively, for pre-2000 and post-2000 results. This suggests there are positive spillover effects from right-to-work laws, perhaps due to greater coordination of firm activities and suppliers in regions that cross state lines.
- Construction employment gained as a share of total employment in border counties with right-to-work laws: by 14.2% in pre-2000 states and 1.6% in post-2000 ones. By comparison, border counties in non-right-work states had just 0.8% higher construction employment for pre-2000, while those bordering post-2000 states saw an 8.7% decrease.
- Construction employment in the interior counties of right-to-work states was mixed, estimated to be 15.0% higher in pre-2000 states but 7.1% lower in post-2000 ones.
- The utility and information industries showed similar results: Both saw increased employment share in border counties in right-to-work states but had decreased employment share in interior counties in right-to-work states and in border counties in states without right-to-work. In right-to-work border counties, employment share in the utilities sector increased by 17.6% and 6.1% for pre-2000 and post-2000 states, respectively. Conversely, employment share was 22.5% and 23.6% lower in non-right-to-work border counties, respectively. In interior right-to-work counties, it also decreased, but not as much: by 4.9% and 17.5% in pre-2000 and post-2000 states.
- In education services, right-to-work laws were associated with a reduction in employment share, except in post-2000 border counties in non-right-to-work states, where it was associated with a 1.3% increase. In right-to-work border counties, employment share in this industry was 30.8% lower in both pre-2000 and post-2000 states and 39.3% and 29.5% lower, respectively, in interior right-to-work counties.
- None of the results in the transportation and warehousing industry were statistically significant, but the estimates were generally positive for employment share in right-to-work states, ranging from 4.0% higher in interior counties in post-2000 right-to-work states to 11.7% for both interior and bordering counties in pre-2000 states. Border counties in post-2000 states had a 3.5% reduction in employment share in this industry, however.
The table below shows these results in full.
Graphic 1: Illustrative Effects Based on Estimation Results from Spatial Error Model, 2018
Note: ***, **, and * denote statistical significance at the 1%, 5% and 10% levels, respectively.
Illustrative effects calculated on the following assumptions:
1) The typical county borders five other counties.
2) Right-to-work border counties typically border three other right-to-work counties.
3) Border counties in non-right-to-work states border two right-to-work counties.
See the Technical Appendix for more details.