Policy Research

The Economic Effects of Adopting a Right-to-Work Law: Implications for Illinois

Robert Bruno, Roland Zullo, Frank Manzo IV, Alison Dickson

Summary

The authors use two rich data sources: The Current Population Survey Outgoing Rotational Groups, and the Covered Employee and Wages program, they then use a number of statistical analysis techniques to determine the relationship between right to work laws and a number of key economic variables. The authors find that workers in Right to Work states earn around 10% less on average than their counterparts in collective bargaining states, across a number of fields, in both the private and public sector, holding all else constant. In terms of employment rate, the authors find that there is a mixed effect on unemployment, which was not significantly significant. RTW laws do make a worker around 10% less likely to be a union member, and “almost no factor is as significant as RTW laws in determining a worker’s probability of being a union member”. The authors also found that for various ethnic groups, RTW laws lowered their wages on average, holding all else constant. The authors end by concluding RTW laws would have major negative effects on the Illinois economy if adopted.

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Policy Implications

While one of the most advanced and comprehensive statistical analysis of right to work laws, the author’s works hold with the majority of research on the effect of right to work laws. States that adopt right to work laws can expect on average negative economic effects as a result of the law, albeit small and mixed.