Right-to-work laws have shown themselves to be useful economic development tools. Research by academics and other scholars generally show positive economic gains from adoption of right-to-work laws. In this study we investigated the impact by examining changes in county-level employment as a percentage of total private employment and report findings across the six most union-dense industrial sectors. The effects of right-to-work adoption on these employment shares were measured using data from 2018.
By employing a border county analysis, this study controls for many economic phenomena that might otherwise influence these employment data. Adding variables to control for such things as county population, poverty, different age groups, race, gender and education and a state’s economic freedom score from the Fraser Institute’s “Economic Freedom of North America” attempts to further isolate the impact of right-to-work laws on county and state economies. The effects of right-to-work were measured for 2018 but the impacts are divided into two categories based on whether the policy adoption occurred before or after the year 2000.
The results are generally positive and significant. Border counties in right-to-work states had higher employment share as a percentage of total private employment in most industries studied. In addition, these employment gains appear to come from losses suffered in border counties in states that did not have right-to-work laws in place. For instance, in the largest single industry studied — manufacturing — border counties in right-to-work states experienced 12.1% higher manufacturing employment share in 2018 if they adopted right-to-work before 2000 and 20.7% higher employment in 2018 if they adopted after 2000.
More narrowed analyses of Michigan and Indiana found similar results. Counties in right-to-work states in these Midwest regions saw employment share increase, while counties situated in non-right-to-work states generally saw employment share declines. This suggests that employment opportunities in the industries studied tended to shift from counties in non-right-to-work states to those in right-to-work states.
Policymakers interested in maintaining or encouraging job opportunities in their states would be wise to protect or adopt right-to-work laws. This study adds to the evidence that shows largely positive economic gains from doing so.