This sample includes counties from Indiana, Michigan, Illinois, Kentucky and Ohio. Of these states, neither Ohio nor Illinois had right-to-work legislation passed by 2018, and Kentucky had just passed such legislation in 2017. Manufacturing accounts for roughly 21% of total private employment in this sample. The direct effect of right-to-work in a given county in this sample is estimated to increase manufacturing employment as a percentage of total private employment by 5.85 percentage points, or roughly 27%, a result that is statistically significant at the 5% level. The indirect effect — that is, the collective spillover effect on other counties — is estimated to reduce manufacturing employment by a modest and statistically insignificant 7.7%. The net effect is to increase manufacturing employment as a share of private employment by a statistically significant 19.6% across the five-state region.
We once again observe the same qualitative pattern in both the construction and the transportation and warehousing industries. That is, the direct effect of right-to-work is to increase industry employment share in the right-to-work county while the indirect effect is to reduce industry employment collectively across other counties. In the case of the construction industry, the direct effect (19.5% increase in the right-to-work county) dominates the indirect effect (3% industry employment reduction across the region) such that the total effect is a statistically significant (at the 1% level) increase in construction employment by 16.5%. In transportation and warehousing, all effects are statistically insignificant; however, the total effect is large in magnitude and negative, suggesting that the industry employment share in the five-state region is lower by potentially 26.4%, nearly identical to the estimate for the Michigan sample.